Addi, if the settlement date is the end of April, then 90 days prior would be about the beginning of February. Thus, I would expect those wishing to secure the lowest possible share price to start shorting on or about that day. Furthermore, to maximize the short, I would expect they would want the price to have risen nicely the week prior.
Now, let's look at the chart. The most recent high came right at the beginning of February, and the price rose from 6 5/8 to 7 3/8 over seven trading days to get there. Since then, it has gone slowly downhill to its current price of 6 1/2. However, the most telling sign of short activity is on 2/9, the day of earnings when the stock had a high of 7.5 and a low of 6 3/4 but closed on the low on higher than normal volume. The fact the stock has stayed at around this level means, possibly, that shorts are matching the buying to keep the price from rising past these levels.
Yes, a couple weeks of activity within the 90 day period does not a pattern make. So, perhaps I am way premature to assume that shorting has probably picked up dramatically so far this month. However, I offer the above as food for thought. I think the closing price and activity on the day of the next contract release will speak volumes.
- Jeff |
