What if I told you NEGG is going to bust wide open again?
NEGG Is Winding Up Again. I Think Round 4 Is Coming.
I posted about $NEGG before the last major run because the short data was getting increasingly difficult to ignore. Shortly afterward, the stock ripped and the trade paid. I am watching it again, and I think NEGG is quietly rebuilding another legitimate squeeze setup.
NEGG is trading around $19, and here is what currently has my attention:
Short interest: 389,889 shares
Short interest as % of float: 28.35%
Days to cover: 4.58
Off-exchange short volume ratio: 46.23%
Fintel Short Squeeze Score: 97.76
Current Fintel ranking: #2 out of 4,135 stocks
Borrow fee: roughly 30%
Shares available at the tracked prime broker: only 25,000
That is already a serious combination.
A 28.35% short float is substantial on its own. Add 4.58 days to cover and you have a situation where shorts cannot necessarily all exit cleanly if volume suddenly comes pouring into the stock.
That days-to-cover number might actually be one of the more important pieces of this setup. If NEGG catches momentum and shorts decide they want out at the same time, almost five days of normal trading volume would theoretically be required to cover the reported short position.
Obviously volume can explode during a squeeze, but that is exactly the point. Shorts need liquidity to exit. When everybody wants the same exit at once, price can become the mechanism that finds that liquidity.
Now look at borrow availability. Only around 25,000 shares are currently showing available at the prime broker Fintel tracks. A few days ago that number dropped as low as roughly 7,000 to 10,000 shares. It has bounced around, but supply remains limited.
At the same time, shorts are paying roughly a 30% annualized borrow fee. That is nowhere near the four-digit insanity you sometimes see at the absolute peak of a squeeze setup, but 30% is still expensive money. More importantly, it has remained elevated rather than immediately collapsing.
Then there is the Fintel squeeze model.
97.76 out of 100.
Ranked #2 out of 4,135 stocks.
That gets my attention.
Fintel's model incorporates multiple factors including short interest, float, borrow rates and other squeeze-related metrics. A score that high does not guarantee anything, but being ranked second out of more than four thousand names tells you NEGG is objectively sitting near the extreme end of the market based on those variables.
There is another piece developing too: institutional buyers have been appearing.
Recent filings show positions from firms including Jane Street, Barclays, Royal Bank of Canada, HRT Financial, Aquatic Capital, Morgan Stanley, UBS and Geode Capital.
Some of the reported positions are meaningful:
Jane Street: roughly 16,838 shares
HRT Financial: roughly 17,353
Penserra Capital: roughly 23,690
UBS: roughly 16,279
Geode: roughly 18,175
Institutional ownership alone does not cause a squeeze, and 13F filings are backward-looking. But it is interesting seeing professional money accumulating or establishing positions while nearly 30% of the float is reported short.
Now look at the chart.
Anyone who has traded NEGG for a while knows exactly what this ticker is capable of. This stock does not always move normally. It can spend months looking completely dead and then suddenly reprice violently when volume arrives.
We saw it during the famous 2021 run. We saw another explosive move last year. And now NEGG is sitting around $19 after cooling off substantially from its previous run while the squeeze metrics are rebuilding underneath it.
That is exactly the stage that interests me.
I am much more interested in a squeeze candidate before everybody is talking about it than after the stock has already gone vertical.
The ingredients are starting to appear again:
28.35% short float
389,889 shares short
4.58 days to cover
46.23% off-exchange short-volume ratio
Approximately 30% borrow fee
Only 25,000 shares showing available
Fintel squeeze score of 97.76
#2 squeeze ranking out of 4,135 stocks
Institutional buyers appearing in recent filings
And a ticker with a documented history of going completely irrational once momentum hits
The mechanism here is pretty straightforward.
Volume starts increasing. NEGG begins breaking resistance. Momentum traders notice. Call volume starts increasing. Market makers potentially have to hedge additional exposure. Shorts sitting on a stock with nearly 30% short float begin watching losses grow. Some start covering. Covering creates additional buying. Price moves higher. More momentum traders enter. More shorts decide they do not want to be the last ones out.
That feedback loop is what I am looking for.
The 4.58 days-to-cover figure is what makes that scenario particularly interesting to me. Shorts have built a position that is large relative to normal trading liquidity. If normal liquidity suddenly becomes abnormal liquidity because NEGG starts running, the entire equation changes very quickly.
And NEGG has already shown us what happens when that equation changes.
I am not saying the squeeze starts tomorrow. I am not saying $19 automatically becomes $50, $100 or some ridiculous price target. (BUTTTTT it could)
What I am saying is that we have seen this movie before.
Last time I was watching NEGG, the numbers started tightening before the crowd really showed up. Then volume arrived. Then the stock went nuts.
Right now the scoreboard is starting to light up again.
97.76 squeeze score. Number two in the entire Fintel ranking. Almost 30% of the float short. Nearly five days to cover. Borrow still expensive. Available shares still limited. Institutional buyers appearing. And NEGG sitting relatively quiet around $19.
That is exactly when I want to be watching it.
Because once NEGG actually starts squeezing, history says this ticker does not give people much time to think about it.
I think NEGG is winding the spring again.
