I wrote a simple script which produces a histogram of volume divided by price range. Today's was an incredible 4.87M. Besides the IPO, that's the highest ever. The next highest occurred on March 6th, a turn-point doji, which was at 3.2M.
So, there's huge volume with little price movement.....absorption.....there's apparently a lot of selling but someone willing to buy all that's put up for sale. Ordinarily I'd say that's really bullish. But, this is complicated by the short interest. I'd assume with this volume some big dogs, institutions, are selling. And the buyers? Well they're probably the shorts. Like others have speculated, I'd bet more than anything the short interest is getting unwound. If that's the case then, there aren't really as many new holders of the stock at this price as the volume would suggest.....shares just got returned to their rightful accounts.
I think I'll let this trading range run its course and wait for either a sign of strength or weakness and trade the reaction.
I think what might be happening is that large professional shorts are covering and doing it by pre-arranged trades that will not drive the price up. Think about it. . . a short with a large position can't cover en-masse without the price skyrocketing. These block trades used to take place more during after hours trading in the old days. I think a lot of shorts took the opportunity for market weakness to cover. . . right now, a clear prognosis on stock direction is difficult because the valuation speaks against a further drop (currently an absurdly low P/E), but many signals that future growth is endangered are starting to surface.
That the stock withstood this weakness says a lot. However, the DOW was still lower, if I remember, back in May and it was still not pushed beneath 12.
I'm in agreement with you OP. The shorts are getting unwound. This move was IMO set up by the announcement of MS. Pretty slick stuff. I would bet that you'll see some funds get back in here soon. Just my take. Anyway you slice it that is a lot of volume without a big move either way. Makes you think there is something going on behind the scenes??? And why would the shorts get out if they thought there would be an earnings miss?
Sentiment: Strong Buy
I would guess the SI is down near 9 million after today. It was at 10.3 million and wouldn't surprise me if we see a 10/14 SI of 9.5 million. That should be a big signal of what the earnings are going to be. You don't sell off your SI into earnings if you expect a miss. SI guys are risk takers and the risk reward is pretty low here on the short side.
Someone is going to buy in big before earnings here... wait for it.
Sentiment: Strong Buy