The Short Report – 07 Dec 2023

Weekly Reports | Dec 07 2023

See Guide further below (for readers with full access).

Summary:

By Greg Peel

Week Ending November 30, 2023.

Last week saw some heat come out of the ASX200 rally early in the week before order was restored towards the end of the week.

In contrast to the prior two weeks, last week saw what appears to be an awful lot of short position reduction towards the bottom of the table. No less than six stocks fell off the table altogether, and none came in.

Such an abundance always leads me to suspect there may have been a blip in ASIC data, as it has happened often enough before, suggesting everything will go back the other way this week. But there are some explainable moves, so we’ll have to take it for now.

First we note Pilbara Minerals ((PLS)) has jumped up from 18.9% shorted to 20.6%. The last time we saw a stock over 20% shorted it was also a lithium miner – the pre-merged Galaxy Resources. That was a while back.

Yesterday’s extraordinary rally for the ASX200 featured some very sharp (+10%) jumps among lithium miners and short-covering would go a long way to explaining. The likes of Core Lithium ((CXO)) and Sayona Mining ((SYA)) joined in.

Syrah Resources ((SYR)) last week saw a drop to 14.7% shorted from 17.0% for reasons unapparent, other than the stock price has been trending lower.

Rare earth miner Arafura Resources ((ARU)) shot up 17% last week after announcing the completion of early works construction at its Nolans project, but quickly came back down again. Arafura shorts fell to 5.0% from 7.1% last week.

Appen ((APX)) has fallen to 6.4% shorted from 9.6% after it announced an equity raising late last week.

Select Harvests ((SHV)) issued a profit warning last week due to wet weather, bee mites and low almond prices, and fell -24% over the week. That would explain a reduction in shorts to 5.7% from 7.3%.

Imugene ((IMU)) did almost triple in price (we’re talking small cents per share) but that was the week before, yet Imugene shorts have fallen to 5.5% from 7.0%.

Uranium hopeful Deep Yellow ((DYL)) went the other way, appearing at 6.5% shorted from below 5%. The miner upgraded the indicated resource at its Tumas 3 project last week.

Less explicable is a fall from 7.4% to below 5% for Lendlease ((LLC)).

Lots of movement, but we’ll have to wait till next week to confirm it’s all real.

Weekly short positions as a percentage of market cap:

10%+

PLS     20.6
SYR    14.7
CXO   11.5
GMD   10.6


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