Wow - look at the short interest in VET - c.12% of the freefloat or 22 days of liquidity to cover.
It is in the top 15 most shorted stocks on the ASX.
It is only slightly less shorted as stocks like MTS, WHC, FMG etc.
Yet it is close to making all time highs.
Such a high short interest and the stock pretty much at all time highs is very bullish, because at some point they need to cover. Either they are right and the stock blows up, then they cover i.e. mitigating some of the downside as they cover or they're wrong and the stock keeps going up and they get stopped out of their short and are essentially forced buyers.
The key short argument is around regulatory risk, however the issue for the shorters is that if a major regulatory change does not occur at some point soon, VET could be a lot higher given it is cheap, consensus earnings are too low (i.e. it is in an upgrade cycle) and the growth potential as it rolls out and rolls up is substantial.
I know if I was short I would be watching VET very closely!!
VET Price at posting:
$3.25 Sentiment: Buy Disclosure: Held
