Three Interesting (and Very Speculative) Stocks Published: 2022-10-18

Daily Screen

I have been noticing a pattern within the daily short sales activity tool that I wanted to share very quickly. Finding any good long prospects in this current market is definitely a challenge, but here goes.

Pattern

The recurring pattern I've noticed is one where a stock has been in a long decline, but then it experiences a kind of capitulation event that could mark the end or near end. Heavy emphasis on could. I can't blame people for wanting to step aside completely in this market as the opportunities seem to be few and far between. But there are opportunities. There are always opportunities.

Let's take a look at a few stocks and their charts.

CGEN

An Israeli immuno-oncology company, CGEN has certainly seen better days. They are presenting data in November, and the market may be starting to prepare itself. In any case, what we look for is unusual short sales activity, and this stock appeared on our list for October 12th. The unusual short sales activity does not always come along with heavy volume, but in this case it did.

EPIX

ESSA Pharma, EPIX, is located in Vancouver, Canada, and they work on prostate cancer drugs. They have collaboration agreements with Caris Life Sciences, Bayer Consumer Care, Janssen Research & Development, and Astellas Pharma.

Same type of situation here. This stock has been sold hard all this year-- from 15 or so all the way down to 1.40 a couple of days ago. Stocks don't go straight down, of course, (alright maybe some do) so there's usually an opportunity for a counter-trend move at least even in worst-case scenarios.

EPIX showed up on the unusual short sales activity list on 9/21 and 10/12. The long downtrend may be at its exhaustion point (for now) or not. But this does provide a potential clue.

FOXO

This last one is kind of strange (at least to me). Headquartered in Minneapolis, MN, FOXO Technologies focuses on commercializing longevity science and works with the life insurance industry.

FOXO merged with Delwinds Insurance Acquisition Corp in early September, and it's been a straight-down affair ever since. The question is "When is enough enough?" and that's the theme of this article. This stock has appeared multiple times on the unusual short sales activity list quite a few times in recent weeks-- 9/19, 9/21, 10/5, and 10/12. The trading on September 19th and 21st were more indicative of a stock set to continue its downward trend, but the trading on October 5th and 12th may suggest otherwise. The company announced that it "recruited its first distribution partner, California-based BGA Insurance, to begin rolling out Life Insurance Designed to Keep You Alive™ to agents across the state." To short sellers, who more than likely thought this company was a joke, this PR may have been a wake-up call to close out their short positions.

Trading Ideas

These are trading ideas-- NOT recommendations. If you decide to buy or sell or do anything with these stocks, you should realize that the responsibility is all yours, but then that really doesn't even need to be said, does it? The idea is to demonstrate just one way that the unusual short sales activity tool can be used to potentially make money. It can be made even more powerful by combining this information above with fee and rebate rates along with the short interest and days-to-cover ratio. In any case, when big traders make their moves they leave clues behind, and that's what we're looking for.

As always, please direct and comments or corrections to shortablestocks@gmail.com.

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