Short Interest Jumps 25.3% For RSE

The most recent short interest data has been released by the NASDAQ for the 02/14/2014 settlement date, which shows a 885,481 share increase in total short interest for Rouse Properties, Inc. (RSE), to 4,387,731, an increase of 25.28% since 01/31/2014. Total short interest is just one way to look at short data; another metric that we here at Dividend Channel find particularly useful is the "days to cover" metric because it considers both the total shares short and the average daily volume of shares traded. The number of shares short is then compared to the average daily volume, in order to calculate the total number of trading days (at the average volume) it would take to close out all of the open short positions if every share traded represented a short position being closed. Average daily volume for RSE at the 02/14/2014 settlement decreased to 490,193, as compared to 785,053 at the 01/31/2014 report. That brought "days to cover" up to 8.95, a 100.64% increase from the 4.46 days to cover calculated at the previous short interest data release.

START SLIDESHOW:
Top 25 S.A.F.E. Dividend Stocks »

The below chart shows the historical "days to cover" for RSE at previous short interest release dates:

Loading+chart++2014+TickerTech.com

An increased "days to cover" value could indicate that short sellers are using the stock to hedge a long bet elsewhere, or could also mean that short sellers believe the stock will decline in price. When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. So investors tend to keep an eye on that "days to cover" metric, because a high value could predict a sharper price increase should the company put out some unexpectedly good news — short sellers might then rush to cover their positions, and if the "days to cover" number is high, it would then be more difficult to close those positions without sending the stock higher (until the higher price produces enough sellers to generate the necessary volume the short sellers need to close their positions).

The chart below shows the one year performance of RSE shares, versus its 200 day moving average. Looking at this chart, RSE's low point in its 52 week range is $15.88 per share, with $25.26 as the 52 week high point — that compares with a last trade of $18.63.

Rouse Properties, Inc. Chart

In afternoon trading Thursday, RSE was up about 1.2% on the day.

More from Stocks

3 Things Investors Must Know for Monday

3 Things Investors Must Know for Monday

Street Stats: The Mid-Term Elections May Be a Rollercoaster Ride for Investors

Street Stats: The Mid-Term Elections May Be a Rollercoaster Ride for Investors

What You Need to Know About Facebook and Europe's New Privacy Rules

What You Need to Know About Facebook and Europe's New Privacy Rules

8 Bold Moves General Motors Could Make to Rev Up Its Battered Stock Price

8 Bold Moves General Motors Could Make to Rev Up Its Battered Stock Price

Is Your Investment Portfolio Prepared for Trade Wars, Inflation and More Trump?

Is Your Investment Portfolio Prepared for Trade Wars, Inflation and More Trump?