Houston American Energy Corporation (HUSA) had some pretty shocking news yesterday, looks like its best oil well is buggered and the management are being investigated by the SEC.
This company has long attracted the attention of short sellers, and over the past month they have been proven right.
So why are we short now, after all the bad news is out? Often when stocks are heavily shorted, the stock price decline is often more gradual (as shorts cover). And the bad news is likely to get much worse given managements history, the questionable nature of its assets and the lack of financial resources.
Got s/s yesterday at 2.35av. The fade is working well today, will likely cover on a sub 2 washout.
Open Trades Short
VRML, TZYM, MBLTY, HUSA
I had a small personal position of $7.50 April HUSA options, I covered the last of them today ($1.55 to $3.80 & $4.30)
Open Trades Long
CHTP, UNIS, MSHL, CLDX, HZNP, ALXA, SVVC
April Returns, -0.8%