In this episode, Wealth Within’s Filip Tortevski and Pedro Banales examine three heavily shorted ASX stocks where crowded short positions could create sharp upside if the underlying story begins to improve.
DroneShield (ASX: DRO) is the most heavily shorted of the three, with around 15% short interest and 34.1 days to cover. While short sellers may be focused on valuation concerns after its previous surge, continued defence contract momentum could challenge that view. The key technical area is around $1.60, with sustained buying potentially opening the door toward the $4 region.
Domino’s Pizza (ASX: DMP) has 11.76% short interest and 39.2 days to cover. Years of declining prices, weak sales and store closures explain the bearish positioning, but improving franchisee profitability, stronger cash flow and lower debt suggest the turnaround may be gaining traction.
Silex Systems (ASX: SLX) has lower short interest at 7.74%, but the biggest potential liquidity bottleneck, with around 67 days to cover. Progress toward commercial uranium enrichment, including Cameco’s agreement to purchase future production, strengthens the commercial case. Filip Tortevski and Pedro Banales highlight $4 as an important support area and roughly $6.50 as the first major upside target to watch.
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