Technical analysis on HCDI
As a real estate developer and home builder, Harbor Custom Development, Inc. (NASDAQ: HCDI) acquires and develops lands with scenic views to build its housing projects in Washington, California, Texas, and Florida. After listing some of its Washington projects for $278 million, HCDI stock has seen a surge in trading volume. With a volume of 24.9 million over the past week – a massive increase from its average daily volume of 464 thousand shares – HCDI stock increased 44% overnight. Considering its high short interest and high trading volume, many investors are speculating HCDI stock could be a short squeeze candidate.
Currently trading at $2.60, HCDI stock shows a weak support at 2.40 and a weak resistance at 2.66. After HCDI stock’s initial run-up, accumulation took a hit as bag holders left their positions. Currently the MACD is bearish but could be approaching a bullish crossover while the RSI is at 55 after earlier overbuying.
Given the company’s solid share structure of 13.2 million OS and its extremely low float of 9.1 million, could continue to move up on momentum. Currently one of the best short squeeze candidates, HCDI stock could continue its run but entering a position at this time presents considerable risk.
Stock Repurchase
Another pending catalyst for HCDI stock is the company’s stock repurchase program which will allow the company to repurchase up to $5 million worth of the company’s outstanding shares through May 2022. HCDI’s management intends to retire these shares and return them to its unissued shares. This move will reduce the company’s OS by 17% – leaving HCDI stock with only 11.21 million shares outstanding at its current PPS of $2.48. Considering that HCDI already has a low float of 9.1 million shares, this move improves the stock’s long-term outlook.
Short Squeeze
Despite all of these catalysts, investors are taking notice of HCDI stock due to its short squeeze potential. Since listing its units for $278 million, HCDI stock has been witnessing unusually high trading volume – leading to a 44% surge. According to Fintel data, HCDI stock’s short interest is 23.88% and there are no available shares to short. As a result, HCDI stock could continue its run while swing traders potentially hold the stock for HCDI’s Q1 earnings report on May 12th.
HCDI Stock Forecast
After increasing its real estate assets by 500% in 2021, HCDI is beginning to realize revenues from these investments. With the company selling a six-acre multi-family lot for $4.48 million and offering 734 units for $278 million, HCDI is on track to deliver on its promise of $160 million in revenues for 2022. As more and more projects are offered for sale, many investors believe HCDI stock could be a profitable long-term hold.
However macroeconomic trends such as the Federal Reserve’s interest rate hikes will likely put a damper on home buying activity since mortgage rates are already increasing. These higher payment will impact homebuyers and is likely one reason why short sellers have taken an interest in HCDI.
On the other hand, housing is a need regardless of the market. Given HCDI’s focus on the red hot housing markets of Seattle and Austin, the company could weather the storm and prove to be a profitable long-term hold for investors willing to take the risk. Regardless of these long-term trends, HCDI stock is likely one to watch for its short squeeze potential the next few weeks.
Currently trading at $2.60, HCDI stock shows a weak support at 2.40 and a weak resistance at 2.66. After HCDI stock’s initial run-up, accumulation took a hit as bag holders left their positions. Currently the MACD is bearish but could be approaching a bullish crossover while the RSI is at 55 after earlier overbuying.
Given the company’s solid share structure of 13.2 million OS and its extremely low float of 9.1 million, could continue to move up on momentum. Currently one of the best short squeeze candidates, HCDI stock could continue its run but entering a position at this time presents considerable risk.
Stock Repurchase
Another pending catalyst for HCDI stock is the company’s stock repurchase program which will allow the company to repurchase up to $5 million worth of the company’s outstanding shares through May 2022. HCDI’s management intends to retire these shares and return them to its unissued shares. This move will reduce the company’s OS by 17% – leaving HCDI stock with only 11.21 million shares outstanding at its current PPS of $2.48. Considering that HCDI already has a low float of 9.1 million shares, this move improves the stock’s long-term outlook.
Short Squeeze
Despite all of these catalysts, investors are taking notice of HCDI stock due to its short squeeze potential. Since listing its units for $278 million, HCDI stock has been witnessing unusually high trading volume – leading to a 44% surge. According to Fintel data, HCDI stock’s short interest is 23.88% and there are no available shares to short. As a result, HCDI stock could continue its run while swing traders potentially hold the stock for HCDI’s Q1 earnings report on May 12th.
HCDI Stock Forecast
After increasing its real estate assets by 500% in 2021, HCDI is beginning to realize revenues from these investments. With the company selling a six-acre multi-family lot for $4.48 million and offering 734 units for $278 million, HCDI is on track to deliver on its promise of $160 million in revenues for 2022. As more and more projects are offered for sale, many investors believe HCDI stock could be a profitable long-term hold.
However macroeconomic trends such as the Federal Reserve’s interest rate hikes will likely put a damper on home buying activity since mortgage rates are already increasing. These higher payment will impact homebuyers and is likely one reason why short sellers have taken an interest in HCDI.
On the other hand, housing is a need regardless of the market. Given HCDI’s focus on the red hot housing markets of Seattle and Austin, the company could weather the storm and prove to be a profitable long-term hold for investors willing to take the risk. Regardless of these long-term trends, HCDI stock is likely one to watch for its short squeeze potential the next few weeks.
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