Tesla And Shake Shack: Two Heavily Shorted Stocks In New Uptrends
With the S&P 500 starting to move into a new Stage 2 uptrend after a near 6-month consolidation, many stocks across different sectors are moving higher in sympathy. Tech stocks, and notably the software sector have been a big focus of mine and have been leading the market higher this year. One tech stock that has been consolidating sideways for almost a year now and primed to break into a new Stage 2 uptrend is Tesla. TSLA has surged higher the past 2 weeks and during this current week is trading on very heavy volume, already surpassing average volume for the week on Tuesday.
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We know from Stage Analysis that heavy volume on the break above the 30-week moving average is what we are looking for to indicate massive accumulation by institutions. A new uptrend in TSLA combined with a very large short position with over 30% of the float shorted could lead to an explosive rally in this stock. I’ll be looking for a continued increase in volume combined with a break above 360 to confirm the break out into Stage 2.
Shake Shack has already broken out into a new Stage 2 uptrend but is still early in the uptrend. SHAK is even more heavily shorted than TSLA with more than 35% of the float sold short. While heavy short positions is not something I specifically look for in a new Stage 2 uptrend, they are nice to have as a tailwind as they provide pent up demand.
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Disclosure: I am long TSLA and SHAK.
Disclaimer: The views and opinions expressed are for educational and informational purposes only, and should not be considered as investment advice. ...
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