If you’re looking for the most exciting way to make money in the stock market today, penny stocks should be at the top of your list. These high-flying, low-priced names have become a mainstay for day traders and investors alike. The idea of “getting in early” tends to attract those with a risk-on investment strategy. Meanwhile, the daily fluctuations to the tune of hundreds of percentage points keep short-term traders interested.
One trend we’ve seen become a focal point among the Reddit and Fintwit audience involves stocks with high short interest. In the event of a “short squeeze,” these types of stocks can experience explosive moves in short order. Today, we watch a handful of short squeeze penny stocks this week as markets attempt to reclaim early Q1 losses.
Short Squeeze Penny Stocks To Watch
- SeaChange International (NASDAQ: SEAC)
- Progenity Inc. (NASDAQ: PROG)
- Evelo Biosciences (NASDAQ: EVLO)
- Exela Technologies (NASDAQ: XELA)
Best Penny Stocks to Buy Right Now
It’s important to remember something when it comes to short squeeze penny stocks. People have shorted the stocks for a reason. A short is essentially a bet against a company, and in many cases, short interest stocks have likely come under pressure recently for one reason or another. Shorting involves traders borrowing shares from a broker and selling them into the open market.
When it comes time to take their profit, they will repurchase the same amount of shares at a lower price, return them to their broker, and keep the remaining balance of cash that wasn’t used. When a squeeze is triggered, it forces shorts to “cover” or repurchase their shares at higher prices. In this instance, more buying from short-covering and an already bullish market can spark a frenzy of momentum in the stock market. Today we look at a few high short interest stocks to watch.
1. SeaChange International (NASDAQ: SEAC)
You might remember SeaChange from earlier in the year. It was on the list of penny stocks to watch after big news of a merger with TikTok competitor, Triller. In the article discussing the Triller Stock details, we pointed out the timing of the transaction. According to the companies, the initial goal will be to advance digital advertising with TrillerVerz in a deal expected to result in a combined company valued at roughly $5 billion. The expected close of this deal was Q1 of 2022. Now, here we are, right at the end of Q1, waiting on details to emerge.
TrillerVerz has continued to position itself in the entertainment industry. The company recently acquired a majority interest in the Bare Knuckle Fighting Championship and introduced its Trillerverz 5 “Lineage of Greatness” event coming in May. The majority of the speculation and interest is surrounding the completion of this merger.
Where does short interest stand right now? According to data from TD Ameritrade, the short float percentage sits around 10.5% right now.
2. Progenity Inc. (NASDAQ: PROG)
Progenity is a repeat name on the list of short squeeze penny stocks to watch. Late last year, a squeeze helped prompt a move in PROG stock from below $1 to highs of $6.20. Like most short squeezes, shares of PROG came back down to earth relatively quickly. But that doesn’t mean investors have forgotten about the company. The last four sessions have seen the penny stock rebound from its 2022 lows, now approaching the 50-day moving average that hasn’t been tested since early February.
Progenity’s recent corporate update highlighted data from its first clinical device performance study in evaluating the safety and tolerability of its Drug Delivery System capsule. Adi Mohanty, Chief Executive Officer of Progenity, explained, “These studies are important steps toward our goal of initiating a therapeutic intervention trial for our PGN-600 program to evaluate delivery of therapeutics directly to the site of disease in patients suffering from ulcerative colitis, and if we are able to establish accurate delivery in ulcerative colitis, the platform should also be applicable for localized delivery of other drugs.”
Next, the market is likely awaiting Progenity’s upcoming results for Q4 and full-year 2021 next Monday (3/28). Meanwhile, the trading community could have its eyes on the PROG stock short interest. According to data from Fintel.IO, the short float percentage sits around 13.7% right now.
3. Evelo Biosciences (NASDAQ: EVLO)
Shares of Evelo Biosciences have mimicked a similar trend as PROG stock. The last week of trading has seen the penny stock bounce back from its 2022 lows following its recent presentation at the Cowen Health Care Conference this month. Evelo has continued developing drug delivery candidates designed to act on the small intestinal axis. Its SINTAZ platform aims to build a framework for immune, metabolic, and even neurological systems.
SINTAX was recently the focus of a Key Opinion Leader discussion regarding its use in treating inflammatory diseases. In particular, Evelo discussed advances for psoriasis and the potential of SINTAX medicines. This week could be another important one for the company; Evelo reports its Q4 and full-year earnings results on Thursday.
As far as short interest goes, EVLO stock is on the higher end of this spectrum. Fintel data shows that its short float percentage is sitting around 30% right now.
4. Exela Technologies (NASDAQ: XELA)
While it doesn’t have the most significant short interest, Exela Technologies has become one of the penny stocks under $1 to watch in March. Shares have been incredibly volatile, bouncing between lows of $0.34 and highs of nearly $1. This week, XELA stock starts things off around 50 cents as its new President of Exela Healthcare Solutions, Kevin Lathrop, recently stepped in to fill the role.
Exela has made it a point to invest in the healthcare segment of its business, offering claims processing automation solutions, including the elimination of inefficiencies for improving the healthcare ecosystem. Its PCH Global is a cloud-based platform that allows for claims processing and is something Exela continues expanding on. It’s also worth mentioning that the company also acquired Corduro, which now opens the door for payment processing services, including those related to commerce and engagement.
Where does XELA stock sit on the list of short squeeze stocks today? According to Fintel data, the short float on XELA is around 6%.
Short Squeeze Penny Stocks To Buy [Or Avoid]
So, where do short squeeze penny stocks sit on your watch list? Are they something you’re looking to buy, or are you staying away from these high-volatility trades? In general, when it comes to penny stocks, we’re already dealing with speculation as a driving force. Throw in other market metrics like high short interest, and that activity can quickly become amplified.