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

Elizabeth Harrow
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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