Naked Brand Group Ltd (NASDAQ: NAKD) is climbing in the market this morning, trading on early gains of more than 30%. However, with no press releases or SEC filings for quite some time now, many are wondering why. Well, if you’re looking for a fundamental catalyst for the run, you’re going to be disappointed, it’s all technical. Here’s what’s going on:
UPDATE (11/19/2020): NAKD stock continues soaring, up more than 30% in the premarket hours yet again. There’s still no news. The gains are the result of a technical move. Read on for more.
NAKD Stock Rockets: Here’s Why
As mentioned above, Naked Brand Group stock is flying in the market this morning, but there’s no clear fundamental catalyst as to why. However, the move seems to be purely technical. Keep in mind, NAKD hasn’t had the best of times in the market over the past year.
The stock has traded on dramatic declines, moved forward with a one-for-100 reverse stock split in 2019, and has seen further dramatic declines that will likely result in yet another reverse stock split to maintain its standing as a Nasdaq listed stock.
As a result, NAKD stock is one that trades with some pretty heavy short interest. So naturally, it’s a great target for a short squeeze.
Essentially, anything that causes the stock to tick up slightly is enough to scare the shorts and trigger a short squeeze. That seems to be what’s happening today.
Recently, due to dramatic declines, NAKD stock seems to have reached a level of support. When this happen, traders started buying in hopes of a reverse in trend direction. Well, their hopes became a self-fulfilling prophecy as their buys began to scare the shorts out of their positions.
Seriously, Joshua Rodriguez shares his portfolio positions with Alpha Stock News Readers FREE here.
Keep in mind, Naked Brand Group stock is heavily shorted. As a result, while the gains in the stock have been relatively dramatic early on, they may just be the tip of the iceberg. Also, it’s important to remember that playing the short squeeze is a move best for experienced traders. These high-volatility runs for the top have the potential to reverse quickly, leading to dramatic declines. So, if you’re going to trade the NAKD stock short squeeze, please be sure to do so with caution.
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