Jon, in response to your question as to how I quantified my short interest number you can get such information from any of the many business print sources, i.e. WSJ, IDB, Barrons or Market Guide. Presently, the short interest on S3 is approximately 3.6 Mil with its short interest ratio at 1.94 days meaning that it would take about 2 days of average trading to buy back those shares not owned. Additionally, I mentioned in one of my previous posts of my concern about the overhead supply of both long and short holdings. I went back and tabulated the number of shares traded during both upswings and downswings beginning early last Sept.. It was arbitrary and crude but it offered a point of reference to me as to the size of the potential overhead. What I got was approximately 23.7 mil shares of long holdings which included the 3.6 mil shares of shorts. Futhermore, if you look at S3's chart I think you will notice in its three reactions beginning in Nov. that each subsequent uptrend holds about twice the number of trading days to the previous reaction telling me that although there are buyers out there interested in the stock there is more than ample supply to meet both demand and to reduce one's holdings at lower prices, hence the recording of lower highs which is characteristic of a descending right triangle. This is why I think the stock is in trouble, technically speaking, over the near term. Sooner or later the buyers are going to take to the sidelines and the sellers will have their day. If S3 should break it will probably find support at the 14-15 price level. If, on the other hand, the price should hold then we are range bound between 16-18 caught in a rectangle with no place to go over the intermediate period. In any event I still hold to my conviction that S3 has seen its high until much later.
Time will tell,
Keith |
