Click to Enlarge The mid-month short interest report is fresh from the presses, revealing a crowd of traders that appear to be picking and choosing their shorting opportunities instead of adding short interest across the board.
The activity supports what we already know; the market has entered into a “picker’s market” as correlations among the major indices are starting to show signs of decline.
We noted this behavior by the changes in the short interest data on S&P 500 companies. For the last two weeks, aggregate short interest on these 500 companies declined a whopping one-tenth of a percent (0.1%), but the average change in short interest of the companies was an increase of 2.5%. This tells us that there were some large changes at the company-by-company level, changes that are likely to identify some opportunities for trades.
The table below displays the S&P 500 companies that saw the largest change in short interest for the last reported two week period. As always, we filtered our database to only include companies that are trading above their respective 50-day moving averages, something that narrowed the group considerably this time around as fewer than half of the S&P 500 stocks can say that they are above their respective 50-day trendlines right now.
Based on our research, here are three big-name stocks with high short interest but a good chance of a move higher on a short squeeze.