It’s a week where the agressive actions of short sellers, and the big increases of recent weeks has been confined to just one stock: Amcor’s local spinoff, packaging manufacturer Orora, which appears to have attracted the attention of sellers looking at the long-term charts as a reason to sell.
Data provided by IG showed the selling left Orora as the only stock with a triple digit increase in shorts of 102.3% in the week ending yesterday. The next biggest increases came from “property managers National Storage REIT, Charter Hall Group and GPT Group which also saw shorts climb” Angus Nicholson, market strategist at IG told Business Insider, adding that those increases paled in comparison with the big jump in Orora.
In many ways the past week has been more remarkable for the reductions in short positions as traders reduced exposure during Brexit selling last week, Nicholson said. Westfield, Brambles and Macquarie stood out on that basis.
But the volatility also helped Cleanaway Waste Management. As a consistent dividend paying utility with relatively low market beta Cleanaway “is exactly the stock investors seek out in times of uncertainty” and it has “continued to see short positions shrink in the stock,” Nicholson said.
Stocks of the Week
Orora: IG’s Nicholson says “While the stock has bounced back since the Brexit selloff, a number of investors continue to believe that A$2.80 is too expensive for the stock and are more than happy to take the other side of the trade”.
It’s not hard to see why that might be the case for those traders who favour charts as their guide. Orora looks to have a double dose of resistance overhead. That seems to have emboldened sellers and driven the more than 100% increase in shorts.
Macquarie Group: Macquarie is really interesting post-Brexit. While the short positions were reduced on the sell off last week. It is also clear in the price action that that buying back of Macquarie’s stock by the shorts has not fed into the strong bounce that might have been expected.
Time will tell but Macquarie will need to get back above the gap from last week at $70.68 for the buyers to become more secure that the price has bottomed.
Here is the list of the big movers.
Source: IG, ASX
You can follow Angus on Twitter: @ANicholson_IG