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According to the July 27 issue of Barron's, the short interest in ZAP is 1,995,733 shares. This represents an astounding 21% of the float. The earnings are due out next Thursday, and given the likelihood of a positive surprise, I think many shorts will find it prudent to cover before then. I smell a short squeeze, and I smell it happening very soon. ZAP has formed an ascending triangle on the daily chart with resistance at about 23. If it closes above that, I think the stock will move to a minimum of 25 (the all time high). If it breaks through 25, it's anybody's guess how high it will go because it would be making new highs and have no resistance on the chart whatsoever. In general, people make buy and sell decisions based on their entry price. When a stock is making new highs, everybody who bought the stock is making money and this diminishes the selling pressure. Everybody who shorted the stock is losing money, and this increases the buying pressure. When you have this kind of supply and demand dynamics in a stock with only 9.5 million shares in the float, look out because it could rally significantly in a short period of time. |
