SHORT INTEREST CORNER
Hi Reid,
Here's something that folks might find useful.
The short positions on Nasdaq stocks is posted once a month, and was just posted last night. These figures represent short interest as of December 15. You have to be a bit careful of these figures, since they are not updated on a daily basis or anything. They represent a kind of "snapshot" for the month, and things can change. Still, you tend to see the same stocks showing up on the "most shorted" list month after month, and the percentage of the float held short does not typically change dramatically in that amount of time, so they can be very illuminating.
The following stocks have high short interest, and the short interest has steadily increased over the past few months. The "short ratio" is the amount of days that would be required for all short shares to be covered at the current average daily volume, and is calculated by dividing the total number of shares short by the average daily volume. This gives a pretty good indication of how big an effect a short squeeze might have on stock price:
GIVN: (42% of float held short; short ratio is 10 days)
139.142.147.218
DNDN: (47% of float held short; short ratio is 11 days)
139.142.147.218
STKL: (73% of float is held short; short ratio is 6 days)
139.142.147.218
Note that the last two are in downtrends (trading below the 200 ema). None of these stocks looks like a good long setup at the moment (except possibly DNDN), but I think these might be worth watching. When they do set up, the magnitude of the short interest makes them very attractive from a risk/reward perspective. The downside risk especially should be significantly decreased.
Of course, the other side of this coin is that sometimes there is huge short interest in a stock because there is something really really wrong. I sometimes use short interest that way, as well. A recent example was KKD, which I shorted in May when the first bad news hit, and the stock gapped down hard on huge volume as everybody rushed the exits. That one worked out very well, because the high short interest there was related to the fact that there were fundamental problems in the company that were not going to be resolved quickly.
Anyhow, hope you enjoy,
T |
