Top Stocks To Short As Stock Market Surges

Investing

With the markets continuing their upward momentum, it remains to be seen whether this is all a pandemic façade or whether the rally is for real. The S&P 500 is up over 40% from its lows on March 23 in the face of double-digit unemployment, oil prices going negative, US and China tensions, and global protests. Quite the juxtaposition. Thankfully, our deep learning algorithms have used Artificial Intelligence (“AI”) technology to identify several top short positions today.

If you followed our top shorts yesterday, you know that we have identified several biotechnology companies as possible sells. Today the trend continues, with Heat Biologics Inc atop the list. Our AI systems have identified factor scores of D in Technical, C in Growth, D in Momentum Volatility and C in Quality Value for the company that is a US-based immune-oncology company. The stock has an impressive gain this year of 67.89%, but our deep learning algorithms think this is too far, too fast for the micro-cap company with a market cap of 69.4 million.

In the financial services industry is where we find our next top short. Capital One Financial Corp

COF
, the credit card company, is a diversified holding company. They offer a broad spectrum of financial products and services to consumers, small businesses, and commercial customers. Unfortunately, all those end clients are likely to have issues paying their bills on time, and delinquencies are likely to increase. Our AI system has given factor scores of C in Technical, F in Growth, D in Momentum Volatility and C in Quality Value to the company, even after losing 30.39% for the year. The recent rally in the stock price looks like a good spot to fade the company.

Bandwidth In

BAND
c is our next top short and has been given subpar factor scores of F in Technical, F in Growth, D in Momentum Volatility and F in Quality Value by our AI system. The company is in the business of providing a cloud-based communications platform for enterprises in the US. There is a ton of competition in this space, however, and the year-to-date rally of 72.91% is too far, according to our deep learning algorithms. The upside appears limited from these levels, making the short risk-to-reward ratio attractive. The stock is currently trading right at its all-time high and has had several large drawdowns in its history, a trend that may repeat in the future.

Another micro-cap company with a market-cap of only $43.7 million has been identified as a top short today in Guardion Health Sciences Inc. The company is in specialty health sciences, formed to develop, formulate, and distribute condition-specific medical foods. The stock has done extremely well this year, gaining 134.95%, but looks to be overbought at these levels. Our AI system has applied factor scores of B in Technical, F in Growth, F in Momentum Volatility and F in Quality Value to the company.

Our final top short today is EyePoint Pharmaceuticals Inc, a pharmaceutical company that develops and commercializes ophthalmic products for the treatment of eye diseases. The stock has not done well this year, losing 45.68%, a trend that our AI system thinks will continue. It has been given factor scores of C in Technical, F in Growth, F in Momentum Volatility and F in Quality Value.

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