Last week I went short KLAC when it broke 30 resistance. was planning on covering at 25.5 because that was next res pt from Oct 2000. Yesterday it got down to 25.74 pre-market then shot up, in afternoon it didn't look like it would brkdwn so I covered for close to 2 pts instead of 4, not here to complain at all. Yesterday and today KLAC has moved higher on increased vol and beyond its normal daily trading range, whereas while it was declining it was usually trading below its dtr i.e. moving about 1-1.5 pts/day which makes me believe sellers & new shorts weren't comfortable selling or taking on new shorts at this new sub 30 level. I trade this long and short, I react to what the market tells me I don't try to predict( I'd be broke now if I did) but I'm curious as to why KLAC and the SOX are shooting up so rapidly, it seems like more than short covering, maybe bargain hunters as well?
KLAC has been an ATM machine for shorts. With VIX at reversal levels, they are nervous to lock in gains. I doubt there is real buying for the simple reason that there are no real buyers. The mutual funds are tapped out, no hedge fund trader wants this crap and Joe Public closed his E-Trade account.
KLAC seemed due for a bounce back, but beyond end-of-quarter markup I don't see much more room to run. This stock is definitely one of the names more prone to squeezing, will probably peak a bit past its 20-day DMA around 31 as other short-sellers step aside for the time being.
My sentiments as well AAA, maybe it's just short covering I've only been at this about a year just tring to figure out whats going on behind the chart & L2 i.e. why is price moving up. As a trader we react to price and should have a feel for price but we don,t need to know what's driving it I guess.
Yes Illiquid, I was thinking about the 31.5 range but not because of the 20 ma but because most shorts should be out by then going on the theory that many shorted at the loss of 30 resistance and are now covering on this run-up and the 31 range being the short coverers who waited to long to cover thinking it won't go above 30. When position turns against you get out, you can always get back in. A lesson I paid handsomely to learn about over the last year.
Did you play it Fri? The a.m. run-up would've been a nice play but I couldn't force myself to go long today. I shorted the down turn and entered @ 29.35 and am holding over the weekend. EOD it kept bouncing off the 28.5. I notice this happens often while price is declining, it will reach a certain level, in this case 28.5, and it triggers massive buying and run-up in price, then buying subsides, it returns to the .50 and whammo off it goes again. Previously, it would play this game for a while but would eventually break through the price and go lower. Friday it stood its ground and the fact that the .5 was prev close = coincidence?