{"id":658,"date":"2009-05-29T15:44:23","date_gmt":"2009-05-29T20:44:23","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=658"},"modified":"2023-04-10T17:06:56","modified_gmt":"2023-04-10T21:06:56","slug":"the-face-of-a-high-short-interest","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/the-face-of-a-high-short-interest","title":{"rendered":"The Face of a High Short Interest"},"content":{"rendered":"

Before I trade a stock I check its short interest. \u00a0Why? \u00a0Because it may affect how the stock trades. \u00a0Simply, the higher the short interest the more buyers there may be intraday. \u00a026 percent of the float is short JCG. \u00a0I considered this with my every trade today. \u00a0Let’s discuss.<\/p>\n

In our SMB AM Meeting<\/a> we discussed 25 as resistance in JCG. \u00a0On the Open JCG tested this level, it held, and JCG traded down a point. \u00a0JCG rebounded towards 24.80. \u00a0And then the fun began. GMan announced, “There has not been a green candle that has closed above 24.80.”<\/p>\n

Now 25 had been resistance. \u00a0And our charts were showing weakness. \u00a0This is a short right? Not so fast. \u00a0It’s called trading not chart reading. \u00a0There is much more to trading than just reading your charts. \u00a0I called off the shorts. \u00a0Why? \u00a0Not because Mrs. Obama shops at JCrew, though she is a very stylish dresser. \u00a0Because of the short interest.<\/p>\n

From the tape I could see the sporadic buying. \u00a0Buy orders suddenly entered the market causing JCG to spike. \u00a0Offers lifted quickly from over agressive and sudden buying after periods of calm. \u00a0 This can be indicative of short covering. \u00a0With a short interest so high you must be careful calling tops. \u00a0Upmoves often do not make sense.<\/p>\n

I actually got long near 24.71 as JCG could not trade below 24.70. \u00a0And I did this even though JCG could not yet trade above 24.80 and 25 was resistance. \u00a0JCG was in an uptrend. \u00a0JCG had a huge short interest. \u00a0I saw the sporadic buying. \u00a0I sensed a squeeze.<\/p>\n

JCG ended the day much higher. \u00a0And you will see this often with a stock that has a high short interest. \u00a0Be careful. \u00a0Understand that even when your charts are screaming “sell”, that the high short interest may be most important. \u00a0There may be many eager to cover.<\/p>\n

I will be back to talk trading with a blog tomorrow. Don’t forget to follow us on twitter<\/a>.<\/p>\n

\"jcg-05-29-09\"<\/p>\n

\"jcg-open-05-29-09\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Before I trade a stock I check its short interest. \u00a0Why? \u00a0Because it may affect how the stock trades. \u00a0Simply, the higher the short interest the more buyers there may be intraday. \u00a026 percent of the float is short JCG. \u00a0I considered this with my every trade today. \u00a0Let’s discuss. In our SMB AM Meeting we discussed 25 as resistance … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":675,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,10],"tags":[30,290,18],"class_list":["post-658","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","category-mike-bellafiore-bellas-blogs","tag-prop-trading","tag-short-interest","tag-smb-capital"],"yoast_head":"\nThe Face of a High Short Interest | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/the-face-of-a-high-short-interest\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Face of a High Short Interest | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Before I trade a stock I check its short interest. \u00a0Why? \u00a0Because it may affect how the stock trades. \u00a0Simply, the higher the short interest the more buyers there may be intraday. \u00a026 percent of the float is short JCG. \u00a0I considered this with my every trade today. \u00a0Let’s discuss. 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