$HALO Trade – Signs of Short Covering

I first identified Halozyme Therapeutics $HALO as a potential swing trade candidate on April 3rd. The stock was trading at $9.75 when I posted the trade idea on StockTwits. The stock is now trading at $11.00 for a nice 12.82% gain in 5 trading days. This stock has a huge short interest and there have been some signs in after hours trading that someone may be covering a large short position.

Here is the initial post identifying the trade idea:

Stock Twits HALO

I went long the stock on April 4th at the open at $9.79.

HALO Stock Twits 2

I am still long this trade due to some after hours activity that I’ve observed that appears to be someone covering a large short position. The following block trades have occurred in $HALO after hours the last three trading days:

04/06: 41,989 shares, 16,457 shares, 39,956 shares, and 7,185 shares all at  $11.04

04/7: 20,595 shares, 7,408 shares, and 8,900 shares all at $11.03

04/08: 36,427 shares, 9,100 shares, and 34,516 shares all at $11.00

These big blocks in the after hours are not typical for this stock.

Of course, I have trailed up my stops to protect my gains in the event I’m interpreting this data wrong. I should also point out that this trade is tied to the recent breakout in the iShares Nasdaq Biotechnology ETF $IBB; if the $IBB breaks down, it will likely take $HALO with it.

Here is the short interest data on $HALO courtesy of shortsqueeze.com. As you can see, the short interest is a whopping 20.97% of the float:

Short Interest HALO

Happy Trading!

Disclosure: the author is long $HALO

 

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