A Trio of Short-Interest Plays

Have we switched to a market where the trend is going to be lower and the scalp trades are going to be on short-lived upside bounces? It's too early to call that the best strategy, but it is beginning to look viable. Still, we have lots of bearish headlines and cautionary articles in the news, so we probably aren't there quite yet, although I believe we are getting closer.

A few high short-interest retailers report earnings before trading tomorrow, with my focus on Five Below (FIVE). This sector has not been overly impressive with the latest earnings reports. Dollar Tree (DLTR) managed a jump even with weaker guidance, while Dollar General (DG) disappointed all around. FIVE is certainly not the "cheap" one of the group when looking at its huge price-to-earnings ratio or unattractive PEG ratio (price to earnings relative to growth), although it is growing the top line aggressively even if the bottom line doesn't quite reflect the same optimism. The 20% short interest seems to agree, or at least has its doubts, on the valuation of FIVE....279 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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