Short Activity in PNV, page-78

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DocMcstuffins

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31/08/20

12:44

Post #: 46950422
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Originally posted by strangelogic: ↑

You are correct. Generally there is a downward effect when shorts rise unless other catalysts are at play.
What I look for is trends in short activity and building of risk as shown by the days to close trend and how much the Short increases affect SP.

When there is a rise in short and rise in SP there is a strong underlying buying pressure from long investors or traders and the shorts are predominantly rising to stop the price running away - keeping a lid on the SP so to speak. When the SP drops and shorts follow then the shorts are predominantly closing positions to capture profit. This can be seen in the drop around March.

The following is my take only so please use your own judgement as I may be wrong...
The interesting points on the above charts are that shorts rose before the SP was lowest in the year, which pressured the SP lower than it might have otherwise dropped. Then shorts plateaued until mid-April while the SP rose steadily and quickly. The SP then dropped a bit and went sideways with volatility whilst Shorts rose again until mid-May. This infers to me that there has been solid buying support of the SP up until that point. That took the SP up to the 2.50 level.
When the Shorts started easing back for the next two months the SP was volatile but did not have a big push north again so the 2.50 mark proved a strong upper bound (prior to last results).
There was then another steady surge in shorts up until recently which managed to bring the SP down to the 2.20 area with a lower bound around 2.
Days-to close then reached almost double that of the 2.50 trading area but the SP has stubbornly bounced from $2 regularly with the last uplift in SP looking like a bit of a short squeeze prompted by some strong buying form those like DW who see the latest result very positively. I will look at the numbers on Friday to check this.

So, the question for me is how many shorts are held by people still willing to push ths SP down and believe they can sow enough doubt to reap some significant drops in price and how many have gone to lick their wounds/count the modest profit.

The temptation to short sellers in my view is that PNV is a biomed company and that brings inherent risk historically. Secondly the market valuation on first glance looks high and is a strong temptation for short selling.

However there are many holders who know very well what the strengths of the company are and why the valuation is strong. From my research, personal experience and reading on HC (thanks to many great contributors) there are also many who understand the long-term growth opportunity and the risk mitigation factors at play. IMO, as the company grows further, the sustained conviction of holders and continual strong sales performance the will eventually sway more institutional buyers and the short selling will diminish. The announcement of profitability will also be a strong short-term catalyst.

I think that for the short term, there will still be short selling that seeks to capitalise on the lumpiness of the company's sales and general market doubt. I also think that there is likely to be a higher upper bound than 2.50 for the next 6 months.

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Very interesting!! Love the analysis.

I've got a really dumb question, that I have tried googling but haven't found any answers. What is the days to close (on the chart) and what is the significance of that?

Thanks!

PNV Price at posting: $2.26 Sentiment: Buy Disclosure: Held
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(20min delay)
Last $2.04		Change -0.020(0.97%)		Mkt cap ! $1.408B

Open	High	Low	Value	Volume
$2.05	$2.05	$2.03	$285.7K	139.7K

Buyers (Bids)

No.	Vol.	Price($)
14	17508	$2.04

Sellers (Offers)

Price($)	Vol.	No.
$2.05	30820	48

View Market Depth

No.	Vol.	Price($)
17	23721	2.040
22	65758	2.030
16	44960	2.020
16	118324	2.010
29	113739	2.000

Price($)	Vol.	No.
2.050	26207	39
2.060	36679	16
2.070	34155	15
2.080	35406	8
2.090	8028	3

Last trade - 12.01pm 23/05/2024 (20 minute delay)


Last $2.05		Change -0.020 ( 0.63 %)
Open	High	Low	Volume
$2.04	$2.05	$2.04	12476
Last updated 12.15pm 23/05/2024 ?

PNV (ASX) Chart

Short Activity in PNV, page-78

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