What A Rally! Time To Cover? Wow what a rally this stock is having! In my last post I mentioned we should see a little fun if the price could rally; it's gone farther than I expected now. I thought the $4 strike for December expirations would provide heavy resistance, with over 6,000 contracts open. The ease with which the stock reached that level this Tuesday morning makes me wonder if there's some room here for a little more.
There's a lot of open interest on the put side as well, with over 69,000 contracts at the $4 and $5 strikes. These buyers have seen their investment lose over 25% of their value in just 3 days. What is really surprising is that according to ShortSqueeze, short interest is still increasing! They're now claiming short interest of 28.1 million shares, with 15 days to cover.
If that number is accurate, it means that the shorts aren't convinced this rally has much steam left and are going to try and ride this one out. I suppose they could be wrong but I'll be surprised if the stock can close over $4 Friday. I missed out on this move, I was being cheap and waiting for an entry point under $3. At this point I'll be sitting on the sideline for a while, waiting for a better opportunity.