Helios and Matheson Stock Surge Sends Short Sellers Scrambling

Shares of Helios and Matheson have snapped out of their slump, but resistance still looms overhead

May 23, 2017 at 10:42 AM
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Shares of IT services firm Helios and Matheson Analytics Inc (NASDAQ:HMNY) have been on a tear this morning, up 68% to trade at $4.12 after acquiring the license for Israeli company IsItYou's facial recognition technology. As a result, HMNY stock has already notched its biggest share volume day since last October, with the roughly 7 million shares traded so far easily dwarfing the security's 50-day moving average of just over 111,000 shares.

Scanning the sentiment backdrop for Helios and Matheson, it seems safe to speculate that today's big surge is related to some short-covering activity. Short interest on HMNY fell by more than 6% during the last two reporting periods, but still accounted for 19.3% of the stock's float as of May 1. This healthy stockpile of shorted shares represents 2.5 times HMNY's average daily trading volume -- which, as noted above, is a multiple that's already been exceeded in today's session.

Today's big bull gap has propelled HMNY into positive territory for 2017, and offered the stock a break from a lengthy downtrend that's been in place for the better part of the last 52 weeks. In fact, the shares are on track to close above their 50-day and 80-day moving averages for only the second time since Oct. 24, 2016. 

However, the road higher for HMNY isn't exactly clear. The tech stock peaked this morning at $4.90, well shy of its looming 200-day moving average (located at $5.09). This intraday high roughly coincides with a 50% year-to-date return for the shares, and as such, could represent a tough psychological barrier to overcome. Meanwhile, Helios and Matheson's high closing price for 2017 stands at $4.35.

hmny stock price chart may 23

 

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