My comments about moving averages were in connection to steam73 post about TA & not yours.
This massive short position has been a concern to me. I have thought about it for a while & still cannot come up with any good reason for the size, time & price of multi year low based on the know information. The short was not based on technical indicators. The stock was very oversold. Now you can short a few million shares at resistance level but not too many becasue a large position can come back to bite you. The size is toooooooooooooooooooooooooooooooooooooo big, the timing of tax loss selling was wrong the price was very very wrong. Why he did not short at $3.00
Commodity hedge is possible but does not add up in case of UUU. If U308 drops there will be some drop in UUU but not much. If U308 double to $84 then at those U308 prices UUU will more than triple from $1.86. Cannot be hedge against convertible debentures. Fundaments and cash situation of the company is good. Did not check the Rubble rate to the $. But I donot think that is an issue for Rubble bonds. The only thing left is position against the sector. Short positions of CCO, PDN & DML also went up. So it could the same or different sectors shorting the whole sector.Their bet would be the U308 breaks $40 & takes another nose dive. Which it has not happened so far. The short position on UUU is the biggest. Could be two reasons the production UUU is unhedged. It is a pure play on U308 prices plus it has the best liquidity which is important to create a big position & then get out.
You do not take massive short position that maybe unrest may start & disrupt production you have to see that happening first. At this time there is no evidence of that. It may happen or not happen. It could happen 5 to ten years down the road. You do not take a position unless the events have already started. Shorting the stock based on the present conditions in the country does not make sense.
Based on public knowledge there is nothing wrong with the company plus it has a huge backer lender of last resort. Very few companies have such a strong backer. Is there any bad news coming out of the company then the short seller has inside information & that is illegal. Short seller with such a large position will be singled out immediately.
We can only guess only short seller know the reason for his position. I have a feeling that it is a hedge fund.
There is one more possibility that hedge fund has made a mistake & is trying to use it financial muscle to trade out of a bad position & it is not working so far. BBD.B was shorted big time & short seller quite a few pushed the stock under $3.00 very recently. They had to eat their shorts & cover at huge losses. They thought that BBD was in trouble the biggest mistake they made was that they shorted the stock when it was at multi year low. The stock has lot of liquidity. They thought that they can short & then cover at profit it did not work. These hedge funds make huge blunders some go out of business too.
I will give you my example. For trading I take multi positions in a stock. Almost never buy a full position. e.g. If I am buying an oversold stock for a bounce I take one position I would mange it keep it very close to the trading price in case I want to get out with no profit loss or some & reposition. You cannot do this every time so you pick another position way down if you are holding part or all of the earlier position. When you take the second position your average come down it allows you get out at cost or profit in stages. Lets assume that position does not work you take a few more shorts at it if it makes sense. Most of the time it works in a scene that you can trade out of a loss. You need trading skills have to be very realistic & funds to multiply your positions.
We do not know that after shorting 10 million shares he has covered some at a loss from $1.80 bounce & is not re-shorting to take advantage of the resistance. It is possible that he continues to add to the short position we will know in a few days when the short position comes out. In case of BBD there were quite a few short sellers so the exposure was divided. In UUU case all the shorts are coming out of Anonymous & mostly similar style. There can be more than one short sellers but cannot be too many. So you have basically one or few smart Aleck going against the whole market. Maybe he thought that some others would join the club.
This story of short position has to play out.
One thing that I do not understand shorting at $1.86 average & still shorting till $1.80. What does he expect that the stock would hit a buck. Normally short sellers attack a stock like this when the company is insolvent need more cash or some fraud is involved.