6 Short Cover Rallies to Avoid at All Costs

These 6 recent comebacks are just beacons of false hope

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6 Short Cover Rallies to Avoid at All Costs

RadioShack

112912RSH 300x189 6 Short Cover Rallies to Avoid at All Costs
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Down 77% so far for 2012, RadioShack (NYSE:RSH) shares are teasing those investors that like to buy the single-digit comeback plays, but don’t jump on the … you know, I don’t even know what to call RadioShack, which is part of its problem.

Let’s face it: The “Shack” has been trying to change its image away from the store that the techno-geeks go to for electronic parts (I think I can say that since I still shop there for solder, wires and other gadgets), but it never will compete with larger vendors like Best Buy (NYSE:BBY) that we get our gadgets from, not to mention Amazon (NASDAQ:AMZN).

The 15% jump in prices over the last week was likely to be the shorts closing profitable positions. They’ll likely circle around to add new shorts since there’s still meat on the bones for the vultures (short sellers) to dine on.

Don’t buy the pop here.

As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2012/11/6-short-cover-rallies-to-avoid-at-all-costs/.

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