Matthew Kerkhoff, options expert and editor of Dow Theory Letters, continues his 14-part educational...
Curious Action in Metabolix, Inc. (MBLX)
07/11/2008 12:00 am EST
even though the company is an interesting story, the stock has struggled. The shares are down 60% this year and hit an annual low on Monday. The overall weak price action might be part of the reason that short interest has been steadily increasing. According to data collected by our Quantified Analysis group, 23% of the stock's float is now sold short.
What I find curious about today's advance is that I see little in the way of news-based catalysts to account for it. I just looked over my usual news sources and none of them show any stories for today.
As I have said before, sentiment analysis is at its most powerful when it runs counter to the price action. In this case we have skepticism on a down trending stock so we do not have that "counter" scenario. However, we do have a heavily-shorted stock that is showing unusual behavior. This could be nothing more than a bit of short covering but I still think it is worth watching.
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