The Nasdaq correction has brought short sellers into some intriguing names
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Join us in celebrating Schaeffer's Investment Research's 45th anniversary! Ever since our founder, Bernie Schaeffer, made it his mission to become the world's leading options trading publisher, focused exclusively on identifying and timing options trades for our customers, we've delivered decades of consistent success.
Schaeffer's Investment Research was built on Bernie Schaeffer’s vision of providing accessible professional-grade trading information to retail traders, which remains our mission today, 45 years later. We are 100% options because options offer 100% more opportunity than just trading stocks. As a gift from us to say thank you, below we’re sharing a free preview of two of our 10 anniversary stock picks carefully chosen by our top team of traders for our 45th year.
4D Molecular Therapeutics (NASDAQ:FDMT)
4D Molecular (FDMT) continues to confirm one of the strongest momentum profiles in biotech, breaking out to a fresh 52-week high after rallying 76% year-to-date and 212% year-over-year. The stock ranks as a 20-, 40-, 60-day relative strength (RS) leader, suggesting persistent institutional accumulation rather than a short-lived speculative move.
The setup becomes even more compelling given the stock’s elevated short interest. About 25.6% of the float is sold short, with a 15.7-day short-interest ratio, while bearish bets have climbed roughly 300% since August 2025. As FDMT pushes into new highs, short sellers have few technical resistance levels to lean against, increasing the likelihood of forced covering if momentum persists.
Taken together, FDMT offers a compelling combination of strong price momentum, improving clinical fundamentals, and extremely crowded bearish positioning. When a biotech with credible pipeline catalysts begins making new highs while short interest continues to build, the path of least resistance often remains higher as fundamental buyers and forced short covering reinforce one another.
Wolfspeed Inc (NYSE:WOLF)
Small-cap semiconductor name Wolfspeed (WOLF) has experienced a sharp pullback after enjoying a more than 300% gain at its year-to-date high. The broader semi sector pullback has grabbed a lot of media attention, with one article implying the long semiconductor trade is broken.
If interested in taking a speculative position on a stock deep in a pullback from its recent highs, you might find WOLF attractive, as there is little Wall Street coverage and thus it is somewhat off the radar.
Roughly 50% of the stock’s float sold short, implying that if the shares get going to the upside, the rally might get magnified as shorts look to cover. The area around $34.80 and $37 could be supportive, as $34.80 is double the 2025 close and $36.75 is 50% of this year’s all-time closing high. As a bonus, the 100-day moving average is also in this area, while in early May the shares reacted well to earnings.
Don’t miss out on the full report here! Thank you for joining us on this journey within the options industry, and we look forward to working with you as we continue to trade. We hope you enjoy these carefully chosen stock picks from our team of top traders!