Tuesday, March 13, 2012

THQI - Chart Update

One day after having one of its biggest rallies ever THQI posted modest pull back of less than 2%.  I think the rebound is still intact.  The $.65 50DMA will present some resistance, but a break will set $1.00 into focus.  Over 20% of THQI's tradeable shares are in the hands of short sellers, meaning they sold the stock and are holding for further declines.  Should THQI rally from here, there is a chance of a significant short squeeze as those who borrowed shares scramble to either lock in profits, or get out before their losses mount.  Unlike buying a stock, when you can only lose as much as you invest, a short sellers loss potential is literally unlimited, which is one of the reason's why short squeezes occur.  It's a panic and it can cause rapid moves higher in a stock price.

FFN was at these prices with the same THQI 20% short ratio back in December. 

For those of you not familiar with FFN and my call back in December, here is a chart (FFN ulimately traded to over $2.70 a share) and a post on my blog:

FFN Ready for A Short Squeeze?   


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