SIRIUS XM Radio Inc. (NASDAQ: SIRI) has been a very heavily attacked stock by short sellers despite a very low share price.  The short selling peaked in May before some of the short selling activity lightened up.  It turns out that the short selling is back on the rise.

If you look through the table below, what you will notice is that the short selling has risen two periods in a row.

What is more important is that SIRIUS XM’s short interest is actually the second highest it has been…

 

Settlement Date	Short Interest	Percent Change
07/29/2011	295,983,703	7.80
07/15/2011	274,572,534	1.29
06/30/2011	271,062,675	(7.35)
06/15/2011	292,554,953	(7.74)
05/31/2011	317,089,214	9.36
05/13/2011	289,943,915	4.14
04/29/2011	278,421,342	3.02
04/15/2011	270,264,848	1.81
03/31/2011	265,453,444	3.94
03/15/2011	255,399,482	3.14

What is so interesting is that if you just take the dates used and interpolate prices, the short sellers have profited handsomely.  At the July 29 settlement date, SIRIUS XM shares were at $2.11 and shares had been even higher in the trading sessions before that in between the prior settlement date used by NASDAQ in its short interest tally.  SIRIUS XM shares were under $2.70 on both Monday and Tuesday and shares are close to $1.77 today.  That means that SIRIUS XM short sellers had gains of 20% if they covered near the trough of the markets… assuming they don’t think that SIRIUS XM will sell off even more.

As far as the ugliness in the market, the fresh chart from StockCharts.com here pretty much explains it all.  The first problem is that shares had already violated the 50-day moving average (currently $2.08).  The larger and perhaps more extreme problem is that SIRIUS XM has now taken out its prized 200-day moving average (currently $1.80).

Price matters…

JON C. OGG

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