Panicky shorts cover in a hurry

Panicky shorts cover in a hurry

March 22, 2007

An upside surprise for the shorts had them quickly heading for exit. Yesterday's action was a classic short squeeze. Once the market reacted positively to the FOMC statement, the mild buying pressure turned in to full fledged panicky covering. That lead to some interesting fireworks. The cash sitting on the sideline also jumped in to drive the rally forward. After many days we have a day where volume increased. The number of breakouts was 243, ideally I would have liked 300 plus.

Expecting the strength to last for sometime. Even if this bounce is fated to fail, the strength is likely to persist for some time. There might be pullback and shakeout but next 5=10 days might be good for longs. Now if you have a set system like 100% plus or IBD200, you should not be worried. As you already have candidates to look at on long side. The IBD Select list might offer better opportunities for those looking for stocks which are not overextended. Even the 100% plus list has many stocks which are not overextended.

Notice the 100% plus universe has quickly climbed to 341. The high number before the correction started was 400. Another 2-3 days of rally and you would have the number crossing 400 again. Panicky market action on short side always has a high probability of setting up a moon shot counter trend move. The only problem is few people believe that when the panic sets in. That is one of the reason why those who buy panics make money. Maintaining your perspective when the world seems to be falling apart is critical speculation skill.

Market Monitor
Total 4% plus bullish breakouts=243
Total 4% plus bearish breakouts=23
65 day bullish/bearish ratio= 749/336
Stocks up 50% or more in a month=3
Stocks up 25% or more in a month=36
Number of stocks with 100% plus move =341
Number of stocks up 200% or more = 65
4% plus signals for 100plus universe=38
4% plus signals for 200plus universe=8


Select stocks which had 100% plus move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see the post "How to find a stock which makes a 1500% plus move in a year".

AMAG,Advanced Magnetics Inc (Google  Yahoo  Earnings  Chart) 
AMKR,Amkor Technology Inc (Google  Yahoo  Earnings  Chart) 
ANAD,Anadigics Inc (Google  Yahoo  Earnings  Chart) 
ANO,Anooraq Resources Corp (Google  Yahoo  Earnings  Chart) 
AUXL,Auxilium Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
AVRX,Avalon Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
BIDU,Baidu.com Inc (Google  Yahoo  Earnings  Chart) 
BPA,Biosante Pharmaceuticals (Google  Yahoo  Earnings  Chart) 
CLRT,Clarient Inc (Google  Yahoo  Earnings  Chart) 
CSV,Carriage Services Inc (Google  Yahoo  Earnings  Chart) 
CTCH,Commtouch Software Ltd (Google  Yahoo  Earnings  Chart) 
CTIB,Cti Industries Corp (Google  Yahoo  Earnings  Chart) 
DRYS,Dryships (Google  Yahoo  Earnings  Chart) 
FSLR,First Solar Inc (Google  Yahoo  Earnings  Chart) 
GLDN,Golden Telecom Inc (Google  Yahoo  Earnings  Chart) 
GSIC,Gsi Commerce Inc (Google  Yahoo  Earnings  Chart) 
HXM,Homex Development Corp (Google  Yahoo  Earnings  Chart) 
IGLD,Internet Gold-Golden (Google  Yahoo  Earnings  Chart) 
JADE,Lj Internat Inc (Google  Yahoo  Earnings  Chart) 
JAV,Javelin Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
LNOP,Lanoptics Ltd (Google  Yahoo  Earnings  Chart) 
LXU,Lsb Industries Inc (Google  Yahoo  Earnings  Chart) 
MBT,Mobile Telesys Ojsc Ads (Google  Yahoo  Earnings  Chart) 
MEH,Midwest Express Holding (Google  Yahoo  Earnings  Chart) 
MEND,Micrus Endovascular Corp (Google  Yahoo  Earnings  Chart) 
NUAN,Nuance Communications Inc (Google  Yahoo  Earnings  Chart) 
OMG,Om Group Inc (Google  Yahoo  Earnings  Chart) 
OMTR,Omniture Inc (Google  Yahoo  Earnings  Chart) 
ONXX,Onyx Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
PRGX,Prg-schultz Intl Inc (Google  Yahoo  Earnings  Chart) 
PRKR,Parkervision Inc (Google  Yahoo  Earnings  Chart) 
RYAAY,Ryanair Hldgs Plc Adr (Google  Yahoo  Earnings  Chart) 
SNCR,Synchronoss Technologies Inc (Google  Yahoo  Earnings  Chart) 
TNH,Terra Nitrogen Co L.P. (Google  Yahoo  Earnings  Chart) 
TSTC,Telestone Technologies Corp (Google  Yahoo  Earnings  Chart) 
VSEA,Varian Semiconductor Equipment Associates Inc (Google  Yahoo  Earnings  Chart) 
XING,Qiao Xing Univ Telephone (Google  Yahoo  Earnings  Chart) 
ZIXI,Zix Corporation (Google  Yahoo  Earnings  Chart)