Monday, March 26, 2012
THQI - Chart Update
THQI again closed above its 50dma. The stock ,in my view, looks to be in the early stages of a rally that will bring the stock to over $1.00 a share.
Over 23% of the shares available to trade in THQI are in the hands of short sellers. They are betting on more downside for the stock. With any stock there is always the risk it falls but there is also the chance the short sellers buy back to lock in their profits, or prevent a loss should the stock rise from here.
I like to compare THQI to FFN a stock with a similar decline and short interest. FFN rallied from $.51 (THQI's 52 week low is $.48) to over $2.70 a share and with FFN I also noted the high short interest when the stock was at its all time lows. I continued to write about FFN as the chart began to take a more positive tone.
THQI right now has an excellent chart, one that shows a stock recovering from its low prices and looks poised to head higher.
At the end of February almost 14 million shares of THQI are short. Today we THQI traded 771k shares. Should the shorts decide to cover there could be a very sharp rise in the stock. There is also the chance the stock declines from here, nothing in this market is certain. All you can do is take the information you are given and use it to your advantage.