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Yes I have shorted, I am about as happy to short a stock as I am to go long for short to mid term positions. In a bear market shorting a stock is the only short to mid term way to make profit.
Yes, shorts can absolutely place stop loss orders. A lot of people are put off by short positions because they see an unlimited loss scenario. While it is true when you are long you can never lose more than the full value of the stock, and a short can theoretically accumulate loss forever if the stock continues to rise, no-one in their right mind doesn't cover the short position eventually if the decision was wrong.
Just the opposite of a long position, and just as valid in a declining market. Lets say you find a stock at $10 and you think it is overvalued and weak. you believe a 10% correction is likely. You short sell the stock at $10. Now lets say you want some protection and are willing to risk 2.5% for that 10% gain. A 4:1 risk reward. You place a buy to cover order on a stop limit at 10.25. If the stock moves against you you exit the position before you get in too deep.
There are many technical indicators, and I am more familiar with some than others. I do watch money flow, and accumulation/distribution as additional gages but am not experts on them. What I saw was a massive influx of money on the runup on the 26th, and then a very rapid exit to the point where the accumulation/distribution basically ended up back where it started before the runup, maybe a tad lower. What this said to me, and this is just an educated hypothesis, was that there was a good amount of short covering, as the accumulation distribution went back to the area it was before the runup, but the stock remained some 40 or 50 cents higher than where it began after the shares were distributed back out. So it made sense to be that what must have changed was the amount of short positions, as in reality they are not really accumulating stock, just covering on their borowed positions.
At any rate there was a rather large spike to the + side of on balance volume in the last hour of trading today. I do not believe short covering accounted for the bulk of the upward move today. I think there were a good deal of new longs coming into the position. Just my opinion.
Brian
After the runup on the 26th and then the decline many remaining shorts are probably using protective stops to limit their risk until they see how the news from the PR pans out. The real big late volume spikes came in the 2.87 to 2.90 area which probably was some stop loss action there on the shorts, and possibly some buy trigger orders from potential longs. the close obove the 2.90 close is a nice technical bullish signal. There is likely another set of stops and buy triggers just at or above the 3.00 level. This could get interesting next week.
A close over the previous 2.90 close from the 26th would be very nice indeed. A good bullish technical sign on rising volume.
...and it's "baby needs a new pair of shoes"
.. followed closely by "help I don't want to cover"
baby needs a new pair of shoes
Help I don't want to cover
baby needs a new pair of shoes extending her lead
c,mon baby needs a new pair of shoes!!
As best as i can tell short data is compiled and recorded around the 15th of each month. The data you are referencing is likely from shortsqueeze.com and is current for mid December.
My guess is we will see that number has dropped somewhat when the next report comes out mid Jan. I'm betting there was a fair amount of short covering on the day TKO traded 4 million shares which helped drive that record volume day.
I wouldn't be surprised if as much as 20% of those positions were coverred in that rally. That had to be a scary day to be holding any kind of sizeable short position.
As the stock holds the support zone, more shorts will become nervous. If the stock continues to hold the 50 day moving average, it looks more and more like a base is forming from which the stock could spring back up on any strong news or financial performance. This stock should not move up much however without such an event. Just a tug of war at the moment it seems.
Volume has picked up. There are much more large buy orders coming in then sell orders right now. The buy orders are keeping nice upward pressure on the stock. This stock is drawing some attention again today. A rally up with a volume increase over the past couple of trading days would be a good sign. Especially as it is bucking the overall trend of the market today which is under some nasty sell pressure.
Fingers crossed.
Well the specialist likely had no choice with the volume running lean. Would love to know who and why on the 50K purchase. The price has already been walked down to 2.80-2.81. From a technical viewpoint I would love to see TKO hold the 2.80 level and a close above yesterdays high at 2.82 would be even better.
Maybe someone knows something.......
Actually GLL later asked a question about the other Monday song which DSD was correctly answering as The Boomtown Rats.
You said the Boomtown Rats song is not based on a happy story, and rightly so, hopefully you are not saying that by way of comparison to The Mamas and The Papas song, which starts out with a good Monday morning, but quickly transgresses to less cheerful versus.
Monday, Monday, so good to me
Monday mornin', it was all I hoped it would be
Oh Monday mornin', Monday mornin' couldn't guarantee
That Monday evenin' you would still be here with me
Monday, Monday, can't trust that day
Monday, Monday, sometimes it just turns out that way
Oh Monday mornin' you gave me no warnin' of what was to be
Oh Monday, Monday, how could you leave and not take me
Every other day, every other day
Every other day of the week is fine, yeah
But whenever Monday comes, but whenever Monday comes
A-you can find me cryin' all of the time
Now if we wanted to look at the symbolism of this song in relation to a stock position in TKO. It seems to strongly suggest to sell your position into any strong Monday morning rally
Sirius:
Thank you so much for the informative and thoughtful reply. Maybe the rest of the investors read your post as well. The candle chart rose up in afternoon trading and while I wouldn't call it bullish, it did not end up being a bearish engulfing candle which is usually quite bearish.
Cheers to another day holding the support zone.
Bad technicals. The candlestick pattern that appears to be setting up is a bearish engulfing. It does not appear that the technical fundamentals support a further rally and it will likely take some news to break that sentiment. The support area is going to be tested again I think, thankfully on light volume.
Good trading day on TKO. Nice follow through and hold on the small gap up this morning. Looks like investors liked the resistance to the sell off last week. It closed up decently today although it is down a couple ticks in after hours trading. 50 day moving average is at 2.72 and is still an important number to hold. The hold on the gap up today is a slightly bullish sign, but it needs follow through confirmation and a couple of higher highs and higher closes to draw any conclusions from. It was nice that the positive trnd held even though the general market did a nasty sell off after the fed minutes scared everyone with their housing report.
Please expand on why some people believe there is an impending anouncement this week, and what you think that announcement mught be. I have seen some rumors here and there, partnerships, acquisitions, but they can be very hard to separate from fact, especially with the bulls and bears all pumping there agendas on so many public boards.
Lakingsphan:
You are correct in your interpretation of the days to cover figure regarding short positions. it is how long it would take to buy back all the short positions in relation to average daily volume. Of course on a major move day such as after the last PR announcement the stock traded 4 million shares so the days to cover is only relevant in relation to average daily volume. Part of what drives many rallies on heavy volume is of course the fact that so many short positions are buying shares back to cover. Still 15 days is a fairly large days to cover figure and bodes well in the event more major news comes out.
I concur. The second sale by an officer is cause for some attention. Also the market held nicely at support all day then falterred within an hour of the first i saw of the filing on this board. Coicidence....maybe. But investors do watch this sort of thing. A nice PR that gets a pop in share price, then two officers selling shortly before earnings are announced are indeed cause for a yellow flag.
There are other valid reasons for selling shares of course, particularly related to tax season, but the wise investor always probes for information.
Best Holiday Wishes.
125,000 shares. That is a bit of a sale there even if he does hold over 2,500,000
Do any of the members who've been following this stock for a while know when any earnings numbers will be announced? It looks like from past history the end of December brings an earnings number. If so, it is a tad unnerving to have two officers sell shares ahead of earnings.
I do not care for the close below 50 day MA.
At the moment there are more buy orders at 2.70 then sell orders at 2.71. The market participants are starting to believe 2.70 will hold as support. If it does we could see a test of the 3.00 resistance level next week or the week after. The extra holiday for the markets will likely keep volume depressed a bit next week without news.
Huey,
Thank you for making me take a second look at the short interest. I was getting my info at short squeeze and I thought since the price updated daily that the short interest number did as well. Now that I looked into it closer it appears it is a monthly figure that comes out about mid month. I have not been watching short interest for a very long time and did not realize it wasn't a daily update.
Please disregard the comment on short interest and my apologies.
Some technical rambling, that and a couple glasses of Merlot make me feel better. A darn near perfect doji candlestick on the daily chart. The doji represents indecision. The session was obviously controlled by the sellers but they could not break through support in the 2.70 area which is a good sign. Looks like the 50 day moving average is about 2.72-2.73 Right about where we closed. This type of doji often precedes an emergent trend and sometimes a reversal in trend, and the day after the doji is often the one that shows where the trend will go next. This doji both shows the buyers had no enthusiasm to carry a rally and the sellers could not break support. The doji by itself shows only the indecision and the days that follow it often confirm the upcoming trend. Unfortunately with the holiday coming up the market is not likely to make such a decision on Friday. I think the best we can hope for is the 2.70 line to hold through the day tomorrow.
Watching the short interest it looks like there was not much covering and no significant new positions established, which confirms the indecision. Another press release would be nice next week to help invigorate the buyers and give the shorts some nerves. Hey it's a new year, we can ask can't we?
Sirius. I would imagine I know about enough to be dangerous as well. Technical vs fundamental, well it's a school of thought, or two of them actually. They generally track each other though. The 2.70-2.75 price level is critical for several reasons. If you look at history over ythe last several months many wars have been fought in this area. It is also the area of the 50 day moving average. Add to that there was a W bottom in this stock back around Aug and 2.74 was the high of the middle of the W. technical points work for two reasons. One of them is the inherent math in them, but the other is as traders become aware of these pionts and react to them they create a self fullfilling prophecy. ie if everyone believes that the stock bouncing multiple times off a support line means it's going to go up, traders will start buying there and take the stock up.
As I said I know enough to be dangerous and have not been at the game a very long time, but I read a lot. TKO seems to have some questionable fundamentals, but if the recent news follows through it should boost their bottom line. The shorts are betting none of this translates to the bottom line in the near future.
On the bright side this stock has a lot of history in the last year in the 2.50 to 3.00 range and a double bottom W pattern in Aug. It would take some fairly negative news to break it back towards that bottom.
That is my 2 cents. Hopefully it's worth 4 cents in the near future.
Good luck all.
At the moment there is a lot of buying support just above 2.70 and not as much sell pressure. Buyers outnumber sellers at the moment. Could be some of those shorts are covering a bit here at the support level. It is early in the day, but the current candlestick on a day chart is forming an inverted hammer. I like the support the stock is getting at 2.70.
Thanx for the welcome. I saw some of the discussion on your guitar. Looks great! Can't play to save my life, but I wish i could.
I am new to the board and the site. This looks like a great community with lots of valid discussions going on and not much of the hype I see elsewhere. I got in this stock on the move and am awaiting the rest of the shake out and hopefully some more good news or guidance down the road.
Hope everyone had a great holiday and has a nice close to the year.