Hi Loridans,
Thanks for the chart, but I’m just starting to learn more than the basics on the chart reading and more about options trading. So maybe you can help me out.
From your chart this is my best guess at what you are trying to tell me. Based on what I think a short squeeze is, a jump in volume should happen caused by the shorts trying to cover. So this should happen at a point where the stock starts going up on normal volume or big news and the shorts get worried and start covering causing volume and price to rise quickly.
So on your chart I see this around July 7th, the wick goes much higher than the body on that day and news is announced by CCTR they expect to double net income by more than $40 mil in 2009. This gives a signal for the shorts to cover.
The next day July 8th we see the highest volume on your chart. So is this actually the short squeeze everyone is talking about and it has already happened? And now that stock as managed to maintain its rise from a low of $0.02. Even after the two weeks of $0.02 profit takers making money from July 8th to August 11th, so from Aug 12 and on we see any remaining shorts getting out and on Aug 18th they are pretty much all out of their short positions. This is of course all based on legal short selling and I think average number of days to cover being 30 to 90 days. I think I would be able to understand this better if I knew more about Market Cap, # of shares issued vs. # of shares sold, vs. floating shares, which is my next self taught lesson.
From what I understand of Naked shorts is that the trading house such as E-trade sells me says 30,000 shares on the books, but does not actually buy them hoping to buy them short later on to fill my position. Say, charging me $1.00 a share, but buying them at $0.50 ps. Thus none of this volume shows up until a squeeze.
The only other thing I see is the big green bar on May 13th where the stock goes up almost $0.30 in one day , but I can make since of that, there wasn’t any news that I am aware of that day that would cause that, and I don’t see volume to support shorts covering. So that really throws me off. At first I thought maybe this was the squeeze, but where is the volume??????
So how did I do, or did I totally misread that? Do I have to go back to class?
If I am wrong could you point what I should be seeing? And if your explanation does not include that weird day on May 13th where stock goes up to $0.3230, a blurb explaining that would be cool as well.
Thanks
Tommy 9
AI
