We may be just a little more than a month into the new year, but there have already been a handful of Russell 1,000 stocks that have posted absolutely massive moves. There are currently seven Russell 1,000 stocks that have doubled year to date, some of which are more embattled high-growth stocks like Carvana (CVNA) and Peloton (PTON). Breaking down the index into deciles based on which stocks have the highest levels of short interest clearly shows that the top performers have also been those which have been most heavily bet against by investors. Whereas the decile of stocks with the lowest levels of short interest has risen a mere 4.4%, the decile of most heavily shorted names is up a substantial 36.3%.
Expanding to the Russell 3,000, in the chart below we show an equal weight index of the 100 most highly shorted stocks. Over the past month, the group has rallied almost 30%. That is a comparable rally to this past summer and outside of that, the only larger rallies of the past five years were coming out of the COVID Crash and the early 2021 short squeezes. This is not the first rodeo for highly shorted stocks flying higher. Click here to learn more about Bespoke’s premium stock market research service.