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At the start of each week, I like to look at ASIC's short position report to find out which shares are being targeted by short sellers.
This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right with a company.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Pilbara Minerals Ltd (ASX: PLS) remains the most shorted ASX share after its short interest rose slightly week on week to 21.4%. Short sellers don't seem to believe that lithium prices will be rebounding any time soon.
- Syrah Resources Ltd (ASX: SYR) has short interest of 15.7%, which is up week on week. Weak graphite prices mean that Syrah is currently limiting production from its Balama operation to save cash.
- Core Lithium Ltd (ASX: CXO) has short interest of 12.8%, which is down week on week. Much like Syrah, this lithium miner has announced plans to suspend production to conserve cash.
- Sayona Mining Ltd (ASX: SYA) has 10.7% of its shares held short, which is up sharply week on week. Short sellers may believe that Sayona Mining will be next in line to hit pause on production.
- IDP Education Ltd (ASX: IEL) has 10.2% of its shares held short, which is up week on week. This language testing and student placement company's shares recently hit a 52-week low. This has been driven by concerns over the impact of student visa changes and the loss of its monopoly in Canada.
- Deep Yellow Limited (ASX: DYL) has seen its short interest fall to 9%. Short sellers may be regretting this one. Booming uranium prices mean that Deep Yellow's shares are up 35% in January.
- Genesis Minerals Ltd (ASX: GMD) has seen its short interest remain flat at 8.9%. This high level of short interest may be due to integration risks from recent acquisitions.
- Liontown Resources Ltd (ASX: LTR) has short interest of 8.5%, which is up since last week. Last week, Albemarle Corp (NYSE: ALB) sold off its stake in the lithium developer at a sizeable discount.
- Weebit Nano Ltd (ASX: WBT) has returned to the top ten with short interest of 8.3%. The smart end of town appears to believe this semiconductor company is another Brainchip Holdings Ltd (ASX: BRN). All hype and no substance (or revenue).
- Flight Centre Travel Group Ltd (ASX: FLT) has 8.3% of its shares held short, which is down week on week. Short sellers appear to believe that the market is too optimistic on the travel agent's outlook.
