Is Skillz Stock The Next Short Squeeze Play? What To Watch

Skillz Inc SKLZ was trending on r/WallStreetBets Wednesday after rising over 11% higher in Tuesday’s trading session. In the pre-market the eSports and gaming competition-focused company was soaring up another 7% higher.

Retail traders have been banding together within groups throughout 2021 to and targeting specific stocks to buy shares of, en masse, to run the stock higher. The most well-known stocks targeted were GameStop Corporation GME and AMC Entertainment Holdings, Inc AMC but numerous stocks have caught the eye of retail investors for their bizarre underlying statistics.

Skillz SKLZ fits the bill for a short squeeze target:

• Small Float: Skillz has a relatively small float of 281.35 million shares.
• High Ownership: 72.88% of Skillz float is held by insiders and institutions with insiders owning 15.08% of available shares and institutions owning 57.80%.
• High Short Interest: 57.28 million, which means 18.98% of Skillz total float is held short. This number is up from 49.9 million in July.

See Also: Corsair, GameStop, Skillz, AMC, Alibaba And More: Stocks Buzzing on WallStreetBets Today

The Skillz Chart: Skillz is a relatively new company that went public through a SPAC and debuted on the New York Stock Exchange on April 27, 2020. Amid sports betting sector hype at the start of 2021, Skillz reached a Feb. 5 high of $46.30 before falling almost 80% and toward its IPO price of $9.95.

When Skillz retraced near to the level on Aug. 19 and Aug. 20, the stock created a bullish double bottom pattern and bounced up almost 12% higher in the three days that followed. The stock then consolidated before soaring during Tuesday’s session.

On Tuesday Skillz firmly regained the eight-day exponential moving average (EMA) as support but battled and closed slightly under the 21-day EMA. On Wednesday if Skillz opens above the $12.50 level it will have regained not only the 21-day EMA but a resistance level at $12.50.

If Skillz can trade above the level for a few trading days, the eight-day EMA will cross back above the 21-day EMA which would give bulls confidence a larger rebound is on the way.

Skillz has resistance above at $15.90 and $18.10 and support below at $9.95 and its all-time low of $9.81.