A Nightmare on Short Street

2,102 views

There are several ways to trap a short. To understand how to accomplish this, try to remember how you felt when you had to sell a large position into an illiquid tape. I recall feeling frustrated by an inefficient/corrupt bid/ask system, where I was forced to hit bids below market price to get out.

Now imagine being short a stock spiraling higher–laden with short sellers dying to cover –but keep waiting for a pullback. You can redouble that pain if the stock trending higher is relatively illiquid, measured by average daily trading volume and the size of the float.

For the sake of curiosity and a chance to find something meaningful, an opportunity of a lifetime, I created the following screen inside of The PPT. As of now, here are some notable names.

PAMT

HPTX

USNA

IRG

CARB

SAM

WRLD

CLVS

RRGB

BOFI

BWLD

CHE

SUSS

RH

ESI

OSTK

PETS

The above stocks are nightmare’s to be short into an upward trending tape. Due to the small float size, they have the ability to rip higher without pause, case in point: OSTK.

Out of this bunch, what’s your favorite.

I’ll reveal mine tomorrow.

13 Responses to “A Nightmare on Short Street”

  1. I still remember when OSTK was supposed to be the next “scam” stock like GMCR. Shorts have already gotten their face ripped off.

  2. My favorite is SAM. Love the company.

  3. BBRY. Because I own it.

  4. OSTK. 64% move in 2 days great trap. Decent C&H chart too. I’d like it to pull back a bit.

  5. I went through kind of quick 2nd look at OSTK. Even more impressed. Cup is a beautiful rounded bottom, which completed a measured move from previous H&S. Smoked 8yr downtrend line around 13. Little overhead supply, traders will be eyeballing 39 bucks. Potential Monster trade.

  6. USNA. Mega short ratio for no good reason that I could find in my readings. Earnings in two days. Great chart pattern forming a base at current price. Finally, the open interest configuration on puts and calls gives it a clear run from the current price ($48) all the way to resistance at $55. The company fundamentals are pretty impressive (debt, price/sales, low PEG, forward PE) and justify a higher price. Finally, it seems to have been garnering pretty good reviews for its nutritional products. With the overall country graying and investing more in supplements, it has a good growth trajectory. I haven’t bought it yet but I may buy some for earnings play on Monday/Tuesday.

  7. nice screen: My favs: PAMT, HPTX, ESI, PETS

  8. ESI.. Nice mention RC.

  9. The Eye-Talian Stallion

    BWLD seems to be a fave of 12631 around Supper Bowl time. So is it a hit off-season?
    Maybe the Giro d’Italia will bring out the buyers.

  10. None. CLVS bizarre – missed endpoint / lousy data last year causing stock to be cut in half ( $12 ) and recently went on a rip to $30

    In other news…maybe a solar flare up today ( yes, GTAT ) as ABB will pay 6.35 sh for PWER

Comments are closed.
Previous Posts by The Fly

A Nightmare on Short Street

2,102 views

There are several ways to trap a short. To understand how to accomplish this, try to remember how you felt when you had to sell a large position into an illiquid tape. I recall feeling frustrated by an inefficient/corrupt bid/ask system, where I was forced to hit bids below market price to get out.

Now imagine being short a stock spiraling higher–laden with short sellers dying to cover –but keep waiting for a pullback. You can redouble that pain if the stock trending higher is relatively illiquid, measured by average daily trading volume and the size of the float.

For the sake of curiosity and a chance to find something meaningful, an opportunity of a lifetime, I created the following screen inside of The PPT. As of now, here are some notable names.

PAMT

HPTX

USNA

IRG

CARB

SAM

WRLD

CLVS

RRGB

BOFI

BWLD

CHE

SUSS

RH

ESI

OSTK

PETS

The above stocks are nightmare’s to be short into an upward trending tape. Due to the small float size, they have the ability to rip higher without pause, case in point: OSTK.

Out of this bunch, what’s your favorite.

I’ll reveal mine tomorrow.

13 Responses to “A Nightmare on Short Street”

  1. I still remember when OSTK was supposed to be the next “scam” stock like GMCR. Shorts have already gotten their face ripped off.

  2. My favorite is SAM. Love the company.

  3. BBRY. Because I own it.

  4. OSTK. 64% move in 2 days great trap. Decent C&H chart too. I’d like it to pull back a bit.

  5. I went through kind of quick 2nd look at OSTK. Even more impressed. Cup is a beautiful rounded bottom, which completed a measured move from previous H&S. Smoked 8yr downtrend line around 13. Little overhead supply, traders will be eyeballing 39 bucks. Potential Monster trade.

  6. USNA. Mega short ratio for no good reason that I could find in my readings. Earnings in two days. Great chart pattern forming a base at current price. Finally, the open interest configuration on puts and calls gives it a clear run from the current price ($48) all the way to resistance at $55. The company fundamentals are pretty impressive (debt, price/sales, low PEG, forward PE) and justify a higher price. Finally, it seems to have been garnering pretty good reviews for its nutritional products. With the overall country graying and investing more in supplements, it has a good growth trajectory. I haven’t bought it yet but I may buy some for earnings play on Monday/Tuesday.

  7. nice screen: My favs: PAMT, HPTX, ESI, PETS

  8. ESI.. Nice mention RC.

  9. The Eye-Talian Stallion

    BWLD seems to be a fave of 12631 around Supper Bowl time. So is it a hit off-season?
    Maybe the Giro d’Italia will bring out the buyers.

  10. None. CLVS bizarre – missed endpoint / lousy data last year causing stock to be cut in half ( $12 ) and recently went on a rip to $30

    In other news…maybe a solar flare up today ( yes, GTAT ) as ABB will pay 6.35 sh for PWER

Comments are closed.