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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 to be the most shorted ASX share with short interest of 20%. This is down slightly week on week. It is also worth noting that there appeared to be a short squeeze last week, so this short interest could be about to fall markedly. This was caused by a mine closure in China sparking hopes that lithium prices have bottomed.
- IDP Education Ltd (ASX: IEL) has 14.1% of its shares held short, which is up again since last week. Short sellers have been loading up on this language testing and student placement company's shares as it battles student visa changes in key markets.
- Syrah Resources Ltd (ASX: SYR) has seen its short interest remain flat at 12.8%. This graphite miner has been struggling with low battery material prices and high cash burn.
- Lynas Rare Earths Ltd (ASX: LYC) has seen its short interest rise to 11%. Weak rare earths prices continue to weigh heavily on investor sentiment.
- Liontown Resources Ltd (ASX: LTR) has 10.9% of its shares held short, which is up week on week. However, like Pilbara Minerals, this lithium miner also could have experienced a short squeeze last week. So, don't be surprised if its short interest drops next week.
- Chalice Mining Ltd (ASX: CHN) has short interest of 10.3%, which is up week on week. Short sellers haven't been put off by news that this mineral exploration company plans to look for copper and gold.
- Paladin Energy Ltd (ASX: PDN) has entered the top ten with short interest of 10.3%. Short sellers will have been disappointed to see uranium stocks jump last week after Russian suggested that it might halt exports of the chemical element.
- Cettire Ltd (ASX: CTT) has 10.2% of its shares held short, which is up week on week. Short sellers have been increasing their exposure to this luxury products retailer following a disappointing update.
- Strike Energy Ltd (ASX: STX) has short interest of 10%, which is down week on week. Last week, this energy company was dumped out of the ASX 200 index. This could actually be good news in respect to short selling, with many short sellers only able to target companies included in the benchmark index.
- Sayona Mining Ltd (ASX: SYA) has short interest of 9.8%, which is up week on week. This lithium miner's shares jumped last week possibly due to a short squeeze.
