Most of the volume associated with the recent 25% rise from $7.98 on Nov. 19 to $10.07 on Nov. 26 (with an interim high of $12.78 on Nov. 25) appears to be from longs, rather than from any short covering. Short interest declined by about 11% or about 663,500 shares during this period, but the total volume for this period was more than 4 million shares. Thus the total short position is largely intact even with the recent contract with XTO Energy, the XOM subsidiary. This data indicates that NES reacts positively and strongly to good news--quite apart from any short covering.
I also note that there's some banter that Mark Johnsrud may have done improper insider trading by picking up shares a second time when NES's price fell below $8, purportedly because he had knowledge of ongoing discussions with XTO. Such an accusation seems silly given the timing. This second set of CEO purchases looks to me like a pre-programmed purchase, given the timing of the trades. In other words, another buy action took place triggered by the drop below $8. And this could happen yet again if NES should fall back to below $8 again (though I doubt that will happen anytime soon). But I'm sure the shorts will be filing a complaint with the SEC just because. They are always looking for an angle to support their cause. So when the usual "heavy debt load" mantra wears thin, they come up with a new scenario that "NES is artificially pumping up the price to hammer investors with a secondary."
But with one more solid piece of good news like the XTO deal, and the smarter shorts will begin to run for cover.
