The equity markets world over and in the United States
continue to remain volatile over the fluid situation in Europe. Back home there are some surprises for
traders who were initially thinking the markets are poised for a tailspin and
will possibly push the week stocks even lower. Abnormally high short positions
in Eastman Kodak Company (NYSE: EK), Motricity Inc (NASDAQ: MOTR) and Hovnanian Enterprises Inc
(NYSE: HOV) confirm this line of thinking by a vast majority of traders. However, recent performance of these stocks
must have taken the traders completely by surprise.
Shares of troubled imaging giant Eastman Kodak Company (NYSE: EK) jumped nearly 9.5 per cent yesterday continuing the uptrend that
started a couple of days back. The stock has an abnormally high float short of
25 per cent. Trading at $1.27, the stock has come a long way from its 52-week
low of $0.54. Despite all its shortcomings, the company remains an extensive
repository of intellectual property and there could be more such days when this
beaten down stock outperforms the broader markets. Taking any clear call on
this stock is extremely difficult in current situation as it is poised to break
out on either side but looking at the rough treatment it has received in the
recent past, the chances of a breakout on the positive side and continuation of
the current rally are more probable. A lot of analysts screaming ‘hold’ may also
be something to pay attention to if one believes analysts have no interest
attached to the stock movement.
Computer services firm Motricity
Inc (NASDAQ: MOTR) is also in a similar situation. The only difference is that the
stock is still reeling under pressure with a float short of 20 per cent. However,
it might just be the beginning of a short squeeze scenario as the stock
currently trades at very low-levels and bottom fishing can take it to higher levels.
New Jersey-based Magnum
Hunter Resources Corp (NYSE: MHR) is in the construction business, but it appears the stock has
been deconstructed in the recent times. The stock is currently available for $1.38
with a short float of 33 per cent. It has a 52-week range of $0.89 - $5.00. The
stock’s range bound behavior despite consistently high short positions is
something which may put the sellers in a peril going forward.