I have doubts about the reliability of the short sales data. This from ASIC website:
"It is important to note that ASIC’s aggregated short position reports are reliant on the accuracy of reports we receive from individual short sellers. While we will monitor compliance with short position reporting and provide additional guidance where necessary, we are unable to verify the accuracy of all individual reports submitted to ASIC, nor to verify that all short sellers in our market (both in Australia and overseas) are lodging reports.
Disclaimer: No responsibility is accepted for any inaccuracies contained in the matter published.
Please note that due to technical difficulties experienced by ASIC, there may be some noticeable variations in the short positions reported compared to the previous day's report. We apologise for any inconvenience this may cause."
So then in reality, there are more, or less, short sold than the ASIC data suggests. My gut feeling is there are less short sales than reported, much less. If I am right, then unfortunately we wont get much SP uplift from a short squeeze. However, you are spot on about the instos. But I doubt they will start buying until there is concrete evidence of the turnaround.
In my view, short sellers are no longer a risk here. I wouldn't have said that earlier in the year. But I believe now the downside risk is skewed against any remaining short positions.
So, I no longer place any weighting to the short sales data and any effect increases/decreases in short sales may have on the SP.
SGH Price at posting:
38.0¢ Sentiment: Buy Disclosure: Held
