Congratulations to everyone who made money on KATX yesterday.
Now, What I am about to tell you is probably the number one LIE in the OTC market so when I hear it I never believe it but I am backing up this statement with PROOF so I believe it to be true.
There is a BIG short position in this KATX.
Please take a look at this link. It is a link to the FINRA site that shows the short positions in each stock for the day. The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States so I believe this is accurate information since it came from their site.
It says that there were 2,344,287 shares sold short yesterday.
Now what does this mean? It means that almost 37% of yesterday's volume was sold short. Why do we care? Well, when someone sells a stock short they expect to buy the stock cheaper than they sold it so they can profit from the difference. Shorts are often aggressive sellers trying to drive a stock lower so they can get investors to panic and sell their shares sending the stock even lower. This selling allows the shorts to step in and begin to buy the stock back at cheaper prices taking money out of your pocket putting it in theirs.
So what do you do with that information? Well that's up to you,but we now know one thing. Someone or some people now need to buy back 2,344,287 shares to cover their short positions. That means that there is a built in buyer into the stock at some point. If everyone panics like they hope you will, they will be able to buy these shares cheap and make a profit. If no one panics these buyers will have to pay market prices for the stock which could potentially drive it higher.
Between the fact that this company has a great story and now we know there is a big short position in the stock there will still be some fireworks ahead. If you own it keep a close eye on it. If you missed the profits from yesterday this still may be a great place to enter the stock.
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