Long And Short Of Short Interest - Tuesday, February 12

Here is a brief review of period-over-period change in short interest in the January 16-31 period in 10 S&P 500 sectors.

XLB (SPDR materials ETF)


Shorts continued to cut back in the second half of January, as XLB (52.78) kept rallying. Intraday between December 26 and January 30, the ETF jumped 16 percent. Since that high, it has slightly come under pressure, with a successful test last Friday of the 50-day moving average (52.08). Near term, resistance lies at 54.50s. Medium term, conditions are extended.

XLE (SPDR energy ETF)


From Boxing Day through February 1 intraday, XLE (63.24) rallied 22.3 percent. Short interest is at a 10-month low. Sellers showed up seven sessions ago at 64-65 resistance. At the same time, bulls defended the 50-day last Friday. With potential fuel for squeeze receding, bulls have their work cut out, particularly medium term.

XLF (SPDR financial ETF)


Last December, XLF (25.75) bulls lost major support at just north of 25, which they recaptured in January. Most recently, this support was defended last Friday. This back-and-forth likely continues near term. Medium term, bears likely have the upper hand. For the past three weeks, sellers consistently showed up at 26. The weekly remains overbought.

XLI (SPDR industrial ETF)


XLI (73.46) short interest decreased 25 percent in January. The rally that began on December 26 pushed the ETF past both the 50- and 200-day. It is currently right above the latter (73.08). Shorter-term moving averages are getting defended. The daily in particular is grossly overbought, but it has been that way for a while.  As long as bulls defend the 200-day, the status quo continues.

XLK (SPDR technology ETF)


XLK (67.96) shorts continue to turn tail. The ETF rallied in the last seven weeks, with shorts lending a hand. This also means that potential fuel for short squeeze is lacking. That said, momentum is intact, with subtle signs of distribution. In the event of weakness ahead, there is decent support at 64.50s.

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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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