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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) continues its very long run as the most shorted ASX share with short interest 19.5%. This is down week on week. Short sellers are betting on lithium prices remaining under pressure for the foreseeable future.
- IDP Education Ltd (ASX: IEL) has 14.5% of its shares held short, which is up again week on week. Short sellers continue to load up on this language testing and student placement company's shares. They appear to believe that student visa changes in key markets could weigh heavily on its performance.
- Paladin Energy Ltd (ASX: PDN) has short interest of 13%, which is up sharply since last week. Short sellers continue to increase positions despite Russia suggesting that it might halt exports of the chemical element and reduce supply. News that Microsoft (NASDAQ: MSFT) is turning to nuclear power to fuel its artificial intelligence ambitions could be something for them to think about.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest rebound to 12.6%. Due to weak graphite prices, this miner continues to burn through its cash reserves. During the June quarter, Syrah's cash balance dropped to US$82 million from US$99 million.
- Mineral Resources Ltd (ASX: MIN) has short interest of 12.4%, which is up strongly week on week. Short sellers also appear to believe that this lithium miner could struggle with weak battery material prices.
- Boss Energy Ltd (ASX: BOE) has 11.3% of its share held short. This is up strongly since last week. Short sellers may believe that uranium prices won't be as strong as the market is expecting.
- Lynas Rare Earths Ltd (ASX: LYC) has seen its short interest ease to 10.7%. Weak rare earths prices are putting pressure on its performance. Though, this hasn't stopped its shares hitting a 52-week high on Monday.
- Liontown Resources Ltd (ASX: LTR) has 10.1% of its shares held short, which is down week on week. This is another lithium miner that short sellers are targeting.
- Cettire Ltd (ASX: CTT) has 9.1% of its shares held short, which is down week on week. Short sellers will have been disappointed to see this luxury products retailer's shares rocket 80% higher during a single session last week after its auditor signed off on its results at long last.
- Deep Yellow Limited (ASX: DYL) is a new entry in the top ten with short interest of 8.9%. It is another uranium stock that short sellers are going after.
