I, as well, will be staying away from this trade for a while. The gap up and gap downs were killin' me. Overnighting this thing is like playing with fire.
BRLC was markedly strong today. Up 4% + in a down market. (One of the only green holdings on my mostly red board). The short interest has dropped from 16.4M shares last month to 16M even this month. (Granted, not a big difference, but someone is covering). A close above 8.11 (50 day SMA) should confirm the trend reversal, and if it breaks out above 9.08 in the next week or so, a massive short squeeze could be in play. I am a long term holder (at least through the next earnings report), but other folks may want to keep it on their watch list.
Unless I am missing something, naked shorts cannot be "squeezed". Since they did not borrow the stock to begin with, there is nothing that is going to force them to cover. If someone "naked shorts" 100 shares at $8, they make $800 profit. Buying the stock has nothing to do with it - only the ability to get away with the naked short without being caught. This is entirely different from when someone legally shorts a stock. If it goes up they have to cover. I think the likelihood that 16.4 million shares of BRLC have been legally borrowed is approximately zero. PS BRLC went up today on the rumor that the CEO will be on Cramer's Mad Money CNBC show (so we will know within the next hour if it is true).
Wait a second. I read that on the Yahoo message board. Where do people hear the rumor that the CEO would be on mad money? Did they hear it from the yahoo board or somewhere else?
It doesn't matter - the show is airing right now - in 50 minutes, the rumor will either be known as true or false.
Well that sucks - I hope it is a false rumor. I can't fathom anything positive from an appearance on Cramer - If he is positive, there will be initial pop for sure, but that would only add to the shorts. More than likely with his past negative opines on BRLC, at best he'd give it a "wait until next earnings".
This is absolutely not true. Naked Shorting is illegal for customers. The actual naked shorting is done by the Prime Broker. They actually kite the shares to the Hedge Fund. This way, Hedge Funds can get inside information, illegal research, whatever they have done to get an edge, and almost be guaranteed a locate. It may be a fake locate, but in their demented world, they are covered in their nimble little minds because the Prime gave them the ok. THE SAME REGS STILL APPLY. THERE CAN BE A BUY IN IF THE STOCK GOES AGAINST THEM. Whether or not it's naked, legal, or incorrectly marked, there is still margin to deal with, as well as other fees. If there is a patent infringement suit, my bet is the dark side knew about it before hand which now explains to me why this stock is on the SHO list. They would not leverage themselves without the perfect edge. Before you all go batshit, there are specific examples of all the above, and they are all public. They will be provided on request. My brother and I thank you.
Come on guys this is silly. Its not because of Cramer The reason why it went up is because it broke the neckline of the reverse head and shoulders that is apparent on the chart. There was also a double bottom buy signal in the lower Bollinger Band. If the price breaks the neckline, then the target price should be over 9 dollars. Let me know if this comes true or not. Thanks. Sorry about the sloppy chart, you see what I mean.
Buying stocks because of patterns on charts is what is silly. The BRLC CEO is on Cramer right now. PS You are referring to the legalities, I was just referring to the effect of the shorting on the stock price, and whether or not there is a short squeeze. The number of shares short on this stock (and a few other stocks, of course) is far greater than the number of shares available to borrow. So, the shares were not borrowed. Therefore, if the stock goes up above the shorting price, there won't be a short squeeze for those shares, because they never borrowed the shares. (If I am wrong on this, let me know, because I don't undestand the technical details of how the naked shorting occurs.) ( However, there may be a short squeeze due to the number of idiot home investors who shorted the stock as well. )
Nah. I dont buy stocks because of news, rumors or fundamentals. I use pure charting. There is a reason why the chart set itself up that way. The chart tells you that there is an event about to happen. What that event maybe I dont really care. You can see the big white candle stick two days ago meaning someone was probably buying on information of the event. The big white candlestick created the double bottom buy signal in the lower bollinger. If the information of the event did not leak out, then it probably would have continued down the nasty path of the lower bollinger channel. If you were looking at this chart two days ago, then you would have noticed the double bottom buy signal to get in. Sometimes this double bottom buy signal will pop up before earnings calls and I have found it credible to get in before the call when that happens (do this at your own risk). Since there is a credible break off the neckline, then a breakout is about to occur with a target price of the (top of head minus the neckline)+ approx 8.1= about 9.39 If you take the length of the last downward wave (8.15-7.15=94) and then multiply by 1.618 you get 1.52 approximately. That would give a target price of approximately 9.52. The top Bollinger Band is now at 8.24. The afterhours price has jumped over that level to about 8.3. The price will pull back to just under 8.24 by the morning. This will create another formation, a cup and handle. If we use the cup/handle thesis which is rough. Then the price target would be the right tip of the cup minus the bottom of the cup. I estimate about 1.5. We can roughly assume that the pullback will be about 1/3 to 1/2 the height of the cup which is .5 to 1 buck off of the high in afterhours. Then add 1.5 to the bottom of the handle and you get another target price. Lets say it gets to a high of 8.4 minus 0.5=7.9+1.5= 9.4 target price. Looking at the chart, the price will encounter resistance at around 9. A/D line and CMO moneyflow show heavy distribution. Here are the three price targets: Head and shoulders thesis target price= 9.39 Golden number thesis=9.52 Cup/handle thesis 9.4 Conclusion: There will be a pullback off of the afterhour highs in the morning due to the top Bollinger Band break. That pullback will be probably to around 7.9, maybe to 7.4-7.5. Traders will be shorting it at the open as it reached over the top Bollinger. They will cover right before the middle band. So look to go long when the chart forms a v-bottom in the morning. Then ride it back up to 9 dollars and sell at that level. The A/D and CMO lines concern me. Someone is going to be waiting at over 9 to dump some shares. My theory is that its best to close out your position early then late. The price targets are only theory and I know a lot of traders will be looking to dump way before then. If this thesis comes true or not, then let me know. Have a good night.