Advanced Micro Devices Inc (AMD)

[bobs10]

AMD: Short Interest UP 5.3% to 39.8M in Jul 2005

Me...

Looks like the boys are doubling up. I wonder if we'll see the same thing happen that appeared to have happen on the last run to $25. Namely, the shorts covered driving the price up to irrational levels and then reestablished their positions at near the $25 level. Once the shorts got things started the momentum boys hopped on and the rest, as they say, was history. They saved their butts that time and I missed a golden opportunity as the stock dropped to the $14 range. If they try it again, hopefully I'll listen to my stomach and do at least a partial Mani number.

The trouble is that $25 doesn't look anyway near as irrational as it did last December. We may need a higher high. Probably best to look for that blow-off day before committing. Assuming the shorts even try anything. A slow move upward would be deadly for the shorts as it would gradually lighten their wallets while leaving them still hoping for a way out.

One thing is for sure, as long as AMD keeps going up all those shorts will have to be covered at some point. The only question is how much pain will be involved and what kind of games the shorts will try to play?

Not all the run up to $25 was due to the shorts, but to me it looked like they had a big hand in it. There was more than just a little irrational exuberance involved by J.Q. Public.