“Below I have listed some securities with high short interest ratios that I found interesting. Remember, a high short interest ratio increases the chances of a large upward or downward move in shares, depending on material events such as earnings, upgrades/downgrades, etc.After each security I have listed some brief notes. However, this should by no means be taken to imply a full assessment. Each assessment involved about a 20-second glance at the basic numbers. Using my economic forecasts and estimates for different industries, I made these notes. In many cases, the notes do not consider specific fundamental issues. The bottom line is that this should be taken only as a very crude starting point.”
“In this section I provide an update from November when I listed some stocks that could offer trading opportunities due to a large short interest held by investors in most (but not all) of the following securities.As I previously discussed, one cannot and should not look at the short interest as the only gauge of investor sentiment. You must also examine the short interest ratio, fundamentals, valuation, contingent liabilities, and other risks.Finally, it is often very important to factor in your forecast of the overall stock market.I typically do not advise non-professional investors to ever short securities because it is the most risky investment move one can make.One of the most reliable indicators for gauging a bearish price performance of securities with a large short interest is the formation of a trend of increasing short interest over the course of a year.If you make the decision to short securities in the future, you should always wait for critical technical support levels to break down rather than taking a short position due only to a large short interest. The reason for this is two-fold. First, you are charged monthly interest to hold a short position and these fees can add up over time. More important, you could get caught in a short squeeze. Therefore, it is best for most who decide to short a security to pile in once the price decline has been established as confirmed by the technical data.”
This article continues.
To continue viewing this entry please sign in to your Client or Member account.
Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher.
These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.
Article 19 of the United Nations' Universal Declaration of Human Rights: Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.
This publication (written, audio and video) represents the commentary and/or criticisms from Mike Stathis or other individuals affiliated with Mike Stathis or AVA Investment Analytics (referred to hereafter as the “author”). Therefore, the commentary and/or criticisms only serve as an opinion and therefore should not be taken to be factual representations, regardless of what might be stated in these commentaries/criticisms. There is always a possibility that the author has made one or more unintentional errors, misspoke, misinterpreted information, and/or excluded information which might have altered the commentary and/or criticisms. Hence, you are advised to conduct your own independent investigations so that you can form your own conclusions. We encourage the public to contact us if we have made any errors in statements or assumptions. We also encourage the public to contact us if we have left out relevant information which might alter our conclusions. We cannot promise a response, but we will consider all valid information.