Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (7642)	2/17/2000 8:28:00 PM
From: Jess Beltz	Respond to of 9236

If I KNEW that no shorts had covered yet, I'd be buying as much as I could possibly get, because they must start covering soon. Every day the stock rises, the position of short sellers becomes more perilous. When they do cover, their buying pressure, added to the already existent demand for the stock will push the stock upward more. When they try to cover all at once (when the squeeze is on) and the demand/supply imbalance becomes extreme, the price rockets upward. If no shorts had covered yet, the probability of a true squeeze makes long positions that much more attractive. On the other hand, if the short interest was completely gone, you know that part of the demand side of the equation is gone, and the only new demand would be from people wanting to enter the stock after it had already run up $30 in the last three weeks. The presence of ongoing substantial short interest increases the likelihood (in my mind) of a continued rally in the price, and the more so the greater the short interest outstanding.