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Short Interest Ratio: First Solar Squeeze of a Lifetime

April 19, 2013 | About:
Any experienced trader will know that a short interest ratio above 8x indicates that the stock is heavily shorted.

Look at First Solar (FSLR)'s chart below which shows a strong rally due to a short squeeze of epic proportions back in April 9.



The 40 million volume traded, with a stock price spike from $26 to close to $40, send short-sellers running for the exit. It also helped push the entire solar sector north, due to FSLR releasing a higher-than-expected full-year financial target and announcing that it will acquire a high-efficiency module company.

So how do we spot these potential huge short squeezes before everyone does? One method is to sieve for stocks with a short interest ratio of more than 8x. As Jim Chanos asserted, a short interest ratio typically above 8x is a heavily shorted stock.

Look at the table below with the said candidate of stocks as potential longs. As of April 18, 2013, Overstock.com (OSTK) had spiked 37% in just one day!





Check back on my website for more details on how to get the more than 1,700 heavily shorted stock list.

Note: This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer to buy or sell any securities.

About the author:

Hedgie
Agnostic trader. CAIA and CHP charterholder. Twitter: @hedgefundtrades

Visit Hedgie's Website


Rating: 4.5/5 (2 votes)

Comments

rdj1234
Rdj1234 - 11 months ago


Hi Hedgie,

by 8x do you mean 8%?

thank you

Roger
Hedgie
Hedgie - 11 months ago
Hello,

No, in days. Will try to find the document of short selling (with Jim Chanos comment) and post it on my website. Check back later.
rdj1234
Rdj1234 - 11 months ago
Thanks Hedgie!

Roger

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