June's Large Short Interest Changes in Major Cult Stocks (ALU, ABK, BGP, BRCD, C, DRYS, NOK, PMI, BPOP, RAD, SIRI, S, UNG, VG)

Many traders and investors love the active penny-stocks and low-priced stocks, and the short interest is often used as a measure for or against the shares of the active cult stocks.  The short selling from June 30 versus June 15 settlement dates saw many changes in some of these actively traded cult stocks.  We have tracked and reviewed the changes in many of these and took a look at Alcatel-Lucent (NYSE: ALU), Ambac Financial Group, Inc. (NYSE: ABK), Borders Group, Inc. (NYSE: BGP), Brocade Communications Systems, Inc. (NASDAQ: BRCD), Citigroup, Inc. (NYSE: C), DryShips Inc. (NYSE: DRYS), Nokia Corporation (NYSE: NOK), PMI Group, Inc. (NYSE: PMI), Popular, Inc. (NASDAQ: BPOP), Rite Aid Corporation (NYSE: RAD), Sirius XM Radio Inc. (NASDAQ: SIRI), Sprint Nextel Corporation (NYSE: S), United States Natural Gas Fund (NYSE: UNG), and Vonage Holdings Corp. (NYSE: VG).  We have taken a look at the moves and the changes in short interest, and then added in on color on each where applicable.

Alcatel-Lucent (NYSE: ALU) is a turnaround that won’t turn around, but it saw a drop in short interest as some bets may have also been there against currency issues.  At June 30 settlement date the short interest was down 10% to 26.54 million from 29,654,276 shares from June 30.

Ambac Financial Group, Inc. (NYSE: ABK) is still a “brand which could disappear”, yet it actually saw a drop of 7.4% in its short interest to 66.37 million shares on June 30 settlement versus 71,653,753 shares on June 15.  With this being under $1.00 now, it may be harder for some to short the stock per broker margin rules.

Borders Group, Inc. (NYSE: BGP) is one that saw a rise in short selling, which also coincides with our “brands which could disappear” thesis: June 30 had 4.71 million shares short, up 12.3% from the 4,193,322 listed on June 15.  The saga continues.

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is another of our “stocks that could double” per our picks, but it is still wobbling directionless for now.  June 30 settlement was 19.649 million shares versus June 15’s 18,397,733 shares short and up again from May 28’s 17,441,727 shares short.

Citigroup, Inc. (NYSE: C) is still also a stock which could double, but it has a monster short interest that is only a tad less large monster compared to mid-June.  The June 30 settlement short interest was 432.8 million shares, down 13% from the 497,392,313 shares short at June 15.

DryShips Inc. (NYSE: DRYS) is the ultimate coin toss, but an active short seller candidate from time to time… The short interest fell 2.7% to 34.91 million shares as of June 30 settlement versus 35.89 million recorded on June 15.

Nokia Corporation (NYSE: NOK) is one that the short sellers had built, but it seems that the shorts starting taking profits.  The short interest at June 30 settlement was 77.29 million shares, down 5% from the 81,384,713 shares short at June 15.

PMI Group, Inc. (NYSE: PMI) saw a small drop that might not even be worth noting: 21.18 million shares short at June 30 settlement, down only 2.3% from the 21,671,711 shares in the short interest on the June 15.

Popular, Inc. (NASDAQ: BPOP) is still active since its last securities offering, and there was a gain of about 5% to 20.137 million shares short as of June 30 versus 19,168,645 shares on June 15.  For a reference, this is still far short of the 25,518,384 in the short interest as of May 28.

Rite Aid Corporation (NYSE: RAD) is another pick of the few stocks which could double, although the current trend is not a shareholder’s friend and it seems like what can stay wrong at the company is staying wrong.  It saw an explosive increase against the fate of the company.  The short interest rose a whopping 67% to 39.56 million at June 30 settlement versus 23.65 million shares as of June 15.  That coincides with the time frame where Rite Aid began testing the sub-$1.00 mark before getting as low as $0.86 in July.  Shares are back up at $0.99, so this may have changed.

Sirius XM Radio Inc. (NASDAQ: SIRI) remained the tug of war, with no resolution… a change of only -0.3%: 227.04 million shares short at June 30 versus 227.67 million on June 15.

Sprint Nextel Corporation (NYSE: S) is seeing a short-seller reversal back up after a big drop…. Short bets rose after seeing a sharp drop the period before… The June 30 settlement short interest was listed as 84.85 million, a rise of almost 17% versus 72,613,518 shares on June 15.  Keep in mind that the short activity has been elevated before, as the short interest was 100,520,184 shares on May 28.

United States Natural Gas Fund (NYSE: UNG) may be the most hated ETF/ETN on Wall Street as its tracking is way off and as the math dictates that the ETF will trend toward zero through time if natural gas prices do not steadily rise.  The short interest rose 3.9% to 11.252 million shares on June 30 settlement versus the June 15 short interest of 10,833,137 shares.  This is still lower than the 11,512,906 counted on May 28.

Vonage Holdings Corp. (NYSE: VG) takes the cake for big gains in the short selling activity.  The short interest rose a monstrous 145% to 6.4 million shares at the June 30 settlement versus 2.605 million as of June 15 and versus the 2,852,429 shares short counted on May 28.

It is possible to set up changes in any of these short interest cult stocks via trade-triangles and other free tools from our affiliate INO for technical analysis.

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JON C. OGG