A check of the preliminary action shows some marked weakness in shares of UAL Corporation (UAUA). The stock is down more than 12% and this caught my eye given the recent discussion about short interest. Here is a look at what is going on.
Chart Courtesy of Thomson FinancialThe premise of last week's post was that the recent pop in UAUA was potentaily being exacerbated by short interest. My argument was went like this -
"the short side may have gotten a bit too crowded and the recent strength may be catching some off guard and spurring a bit of squeeze. If that is the case, this pop could be short-lived..."
A look to the intraday chart below shows that today's gap lower follows a reversal day. That is a situation were you have a strong open but then see steady selling pressure throughout the rest of the day.
It is still too early to label the recent uptrend as being "over" but there are some early signs that suggest the stock could be rolling over...
Chart Courtesy of Thomson Financial
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