These are the 10 most shorted shares on the ASX

The Syrah Resources Ltd (ASX:SYR) share price and the Domino's Pizza Enterprises Ltd. (ASX:DMP) share price are two of ten being tipped to sink lower by short sellers…

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Every Monday I like to take a look at ASIC's short position report to find out which ASX shares short sellers believe could fall in value over the coming months.

Although they don't always get it right, I still believe it is important to consider short interest prior to making an investment.

At the moment short sellers are betting on the 10 shares below taking a tumble:

  • Syrah Resources Ltd (ASX: SYR) continues to be the most shorted share on the ASX with 22.5% of its shares in the hands of short sellers. However, a change of holding notification released last week appears to show some major short sellers closing positions at long last.
  • Independence Group NL (ASX: IGO) has seen its short interest climb to 19.8%. Although the gold miner had a reasonably positive first-quarter of FY 2018, short sellers don't appear to believe the worst is behind it yet.
  • Domino's Pizza Enterprises Ltd. (ASX: DMP) has seen short interest rise to 16.3%. Domino's recent trading update wasn't well-received by the market, much to the relief of short sellers.
  • JB Hi-Fi Limited (ASX: JBH) has 15.8% of its shares in the hands of short sellers. They appear to be targeting the retailer ahead of Amazon's expected launch later this month.
  • Healthscope Ltd (ASX: HSO) has short interest of 14.6%. Weak full-year guidance and falling private health insurance participation numbers has led to the private hospital operator coming under pressure this year.
  • Retail Food Group Limited (ASX: RFG) has seen short interest rise to 12.4%. Its high debt and softer sales are likely to be why short sellers continue to target the food and beverage company.
  • Orocobre Limited (ASX: ORE) has 12.1% of its shares held short. With the lithium miners storming higher amid the bullish outlook for the metal, short sellers appear to be closing positions in a hurry.
  • Western Areas Ltd (ASX: WSA) has seen its short interest fall to 11.5%. Just like lithium, the market is finally waking up to the potential increase in demand for nickel due to its use in electric vehicle batteries.
  • Metcash Limited (ASX: MTS) has short interest of 11%. Short sellers may have their eyes on the wholesale distributor due to the upcoming Amazon launch. While I don't think Amazon's food delivery business is an immediate threat, it could be in the long-term.
  • Myer Holdings Ltd (ASX: MYR) is back in the top ten with 10.9% of its shares held short. All eyes will be on the retailer next week when it hosts a disenchanted Solomon Lew at its eagerly anticipated AGM.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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