Fair enough. But this is precisely why I like buying stocks that are heavily shorted...for the squeezes!
HLF
- Thread starter vanzandt
- Start date
Fair enough. But this is precisely why I like buying stocks that are heavily shorted...for the squeezes!
Yeah, there is certainly something to be said about that. Look at Surfs Shake Shack today. It has a 42% percent short interest on the float. Thats why its above $35. But in the long run, Surf will be right. There's always a reason the short interest is high. The problem with trying to game a squeeze... its just too risky... at least for me. I like to see confirmation of a downturn. I avoid taking high short interest stocks long, albeit there is money to be made doing that.
It's the least risky thing in the world. Once a squeeze begins, there are no down ticks. If you pull up any chart, whether it's the ES, oil, nat gas, SHAK or HLF, you know there is a squeeze when you see green bar after green bar for weeks on end. Without the squeeze, a normal uptrend has pullbacks and sideways choppy action, etc. Squeezes are beautiful because they have none of that. They are unicorn trades. They are hard to find, but once you find them, milk them.
Point well taken. Although I don't know about "least riskiest thing in the world".
Perhaps we'll see one kick off next week with SNAP.Point well taken. Although I don't know about "least riskiest thing in the world".
The tide is so strong, you just ride with the wave. I can't think of anything easier to trade. The problem is there are so few of them.
Hey Mav... put up a 5 day (1 minute) chart of WTW. And then look at HLF today.
Are we looking at a (3 day delay'd) carbon copy? Sure looks like it.
Last edited:
Perhaps. The short ratio in WTW is 5, in HLF it's 25! They have some similar characteristics. Let me add here, I don't think the squeeze has even started yet in HLF. And it may not, but with a short ratio that high if it does, get the f*ck on that train and tell the wife and kids you won't be home tonight. HLF is still too choppy for this to be a real squeeze. WTW same thing. It's like a tornado watch. The conditions are ripe for a tornado but none has been spotted yet. We have short squeeze watches in effect for WTW and HLF. No real sightings yet.
Lets put SNAP in the danger zone too.
Open interest on the 5/12 $24 puts is 36.
Open interest on the calls is 11,700.
I think I'll just buy some PG and sit next week out.
Hey Mav... since you're in the house... I have a theory about short squeezes.
They work a lot better when the lock-up period has NOT expired.
Look at Twilio. $22 after a high north of $60. Dove right after the first round of expirations.
This week we have SNAP...it hasn't expired.... so shorts can be f'd.
Then there's Surf's Shake Shack... that one has expired. Why wouldn't all those outstanding shares that aren't in the float sell into strength? It kind of puts a cap on the squeeze. And that manifested itself yesterday.
These things can be played both ways depending on the stock.
Notice Herbalife didn't take out $70. Albeit their float pretty much matches the shares outstanding so it may not be the best example.
But Shake Shack is. And SNAP will be in 8 months give or take.
Opinion?
Most corporations have very strict protocol as to how insiders can sell shares i.e. 10k shares a quarter. They can't simply unload them anytime they want. Most insiders don't want to sell their shares for tax reasons.