Long And Short Of Short Interest - Friday, Jan. 11

Here is a brief review of period-over-period change in short interest in the December 17-31 period in nine S&P 500 sectors.

XLB (SPDR materials ETF)


Shorts got aggressive during the reporting period. XLB (52.48) dropped to 47.05 intraday on December 26, before rising. This represents breakout retest of 47-48 from two years ago. Two months ago, short interest similarly spiked, but only to immediately drop back down. It is possible the same thing happens this time around – or may have already taken place. The ETF rallied 11.5 percent from that low, and currently sits right under the 50-day moving average.

XLE (SPDR energy ETF)


XLE (62.38) fell as low as 53.36 on December 26. It has since rallied nicely. During the October-December drawdown, the ETF suffered a lot of technical damage, pushing several indicators into oversold territory. On the daily, they have now been unwound. Decent resistance lies at 64-plus. The 50-day is at 63.52.

XLF (SPDR financial ETF)


Ahead of 4Q18 results from major US banks and brokers in the next couple of weeks, XLF (24.44) short interest shot up 55.9 percent in December. Last month, the ETF lost major support at 25. The 50-day rests at 25.37. Bulls’ best hope near term is to recapture that support-turned-resistance and possibly force a squeeze.

XLI (SPDR industrial ETF)


Last month, XLI (67.94) sliced through 67-68, before dropping to 59.92 on Boxing Day. That breakdown is currently being tested. The weekly has room to continue higher, but the daily is getting extended. With the 50-day (68.50) right above, a decent bull-bear duel is imminent in the next few sessions.

XLK (SPDR technology ETF)


Having been burned particularly in the first half last year, shorts continue to stay on the sidelines. From the intraday low of 57.57 on Christmas Eve, XLK (63.66) has rallied to currently test 63-64. A breakout – should one occur – is unlikely to help the bulls much as short interest remains subdued.

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Disclaimer: This article is not intended to be, nor shall it be construed as, investment advice. Neither the information nor any opinion expressed here constitutes an offer to buy or sell any ...

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