Not the ShortsPretty busy with work last week and this week, but managed to take some tonight to time to analyze the daily short data today and have come to the following conclusions:
1. Today's price increase was almost certainly not due to short covering. In fact the net short position for CXRX probably increased today.
2. The overall short position in CXRX is still increasing, the next released Nasdaq short position data will likely show another build for the period about to be released on March 9 (for Feb 29 settlement date). It will also likely show an even larger increase for the next period (up to Mar 15 settlement date), barring large short covering in the next few days.
This is based on looking at the daily short data and extrapolating how this impacts the overall short position.
The short volume as a percentage of total volume for today, March 7, for all reporting exchanges (Nasdaq, NYSE, and BATS exchanges) was 62.9%. This almost certainly indicates a build in short interest. For the period from the Feb 29 settlement date to today inclusive, short volume as 61.9% of total volume on these exchanges. This compares with 62.5% and 64.5% for the periods with short interest builds of 510,762 and 534,225 respectively. The period ends on March 10th trading day (March 15 settlement date), so unless we see a reversal, if this trend continues we may be looking at another similar build.
The short volume as a percentage of total volume for the 2 weeks ending Feb 29 shows an average short volume as percentage of total volume of 54.8%. This compares with 55.5% and 51.0% for the periods with short interest builds of 199,800 and 278,686 respectively.
My best guess for the short interest build for the period ending Feb 29 is 255,000, but the range of possible values is likely from 100,000 to 340,000.
Anyhow, I am not saying this build is good or bad, simply that the current rally is not being fueled by shorts running for the exits. In my mind this is encouraging, as the price is showing resilience in the face of what is likely increasing short interest. If or when the shorts do start heading for the exits we might expect a significant rally.
GLTA,
Marcel
P.S. If anyone is interested in the raw data message me and I can provide you with the daily numbers so you can do your own analysis.