Today’s price action among many tech-oriented growth stocks has been abysmal. The Nasdaq is down approximately 2% this afternoon, as investors appear to be focusing more attention on more defensive plays, with the Dow components outperforming and trading in the green. That said, Sirius XM (NASDAQ:SIRI) is among the Nasdaq stocks seeing a surge in today’s session. SIRI stock is soaring more than 30% at the time of this writing.
This move comes as a result of what appears to be a violent short squeeze higher today. The heavily shorted stock, which has more than 33% of its float sold short (per data from Fintel), saw multiple trading halts in today’s session. These trading halts mostly took place this afternoon, as SIRI stock rocketed from less than $6 to as high as $7.75 in less than an hour.
Since this initial surge, shares have settled down somewhat, with investors receiving multiple opportunities to catch their breath. But the question remains: Is this short squeeze something investors want to jump on right now?
SIRI Stock Jumps on Apparent Short Squeeze
Any time a given stock jumps more than 30% in a matter of minutes, something technical is going on. Trading halts are generally put in place to protect investors from intense volatility during short windows. The fact that SIRI stock has been halted multiple times this afternoon points to just how volatile shares have been.
Given Sirius XM’s relatively low price per share, its very high short interest and budding chatter on social media platforms, it’s possible speculators have begun to break some short positions. While other stocks remain more heavily shorted than Sirius XM, this kind of move is typically only seen during short squeezes. It’s clear that there are many investors on one side of the boat right now — and that tilt is taking shares sky-high today.
Whether this momentum-driven move can be maintained remains to be seen. Indeed, retail investors may certainly be enticed to take profits at some point.
However, the fact that SIRI stock remains one of the most shorted stocks in the market provides the fundamental fuel for a continued rally. For traders and short-term speculators, SIRI is one to keep on the watch list right now. It will be an interesting name to follow in the days to come.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
