The Short Report – 06 Oct 2022

Weekly Reports | Oct 06 2022

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


By Greg Peel

Week Ending September 29, 2022.

The plunge the week before brought on by the US CPI and Fed forecasts continued through last week, up until the last day when the RBA minutes talked about having considered a 25 point hike in September before delivering 50.

That proved but a temporary bounce until the market bottomed out and surged earlier this week, with the RBA indeed delivering a 25 point hike this time.

The week before, as the wipe-out began, saw a mix of profit-taking and short position increases in response to falling prices. Last week, as the table below suggests, there was very little in the way of profit-taking and a lot of increased short positions.

Just before the index bounced. Although no move last week exceeded one percentage point.

We have to go all the way to the bottom of the table to find some green, but the four stocks exiting were replaced by six stocks entering or re-entering.

New faces include minerals E&P company Sayona Mining ((SYA)), which operates in both Australia and Canada, and has seemingly come from oblivion to be included in the ASX200, along with gold miner Gold Road Resources ((GOR)), which is a major shareholder in peer De Grey Mining ((DEG)).

De Grey shorts sit at 7.4%, but that will likely change this week given the company has implemented a capital raising.

Notable climbers last week included the discretionary names of Kogan ((KGN)), Temple & Webster ((TPW)), Domino’s Pizza ((DMP)) and Webjet ((WEB)), as recession talk grows. Domino’s has only been in the table for three weeks and is now 7.3% shorted.

The consumer discretionary sector has been one of the outperformers to the upside this week, with all four of those stocks enjoying solid rebounds.

Weekly short positions as a percentage of market cap:

FLT     14.9
BET     14.2
SQ2     11.8
LKE    10.1

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