Additionally, the scaling of Arrival’s business also remains questionable, with the company pursuing a micro-factory model. The company’s growth plans have been delayed, which has dented investor confidence. In my opinion, over the long-term, Arrival is unlikely to survive in a highly competitive EV market. That’s particularly true, given this stock’s very high short interest, which is still above 20%. After plummeting by 90% over the last 12 months, a short-squeeze rally seems likely. OCGNĪrrival (NASDAQ: ARVL) is another option for investors seeking heavily shorted penny stocks to buy. These are seven of the most heavily shorted penny stocks I’d put on the watch list right now, for those looking to add some risk right now. For traders, it may makes sense to allocate a small portion of one’s portfolio to such higher-risk plays, if the likelihood of a short squeeze rally is high. However, investors can easily see returns of 50% or 100% in the blink of an eye. This can lead to impressive surges in a given stock over a very short amount of time. Dip buying among speculators can induce short sellers to cover their positions (which means buying the stock they borrowed and sold). Companies with high short interest can see what’s called a short squeeze when the market rallies. Among various trading strategies, one that’s recently gained steam of late is to focus on heavily shorted penny stocks or growth stocks.īased on past evidence, a small piece of news can trigger a big move in heavily shorted stocks. However, from a trading perspective, an under-performing stock can be a good investment within a limited time horizon. InvestorPlace - Stock Market News, Stock Advice & Trading Tipsįor medium to long-term investors, it’s essential to screen fundamentally strong businesses when looking to add exposure to a given sector or type of stock.
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