Shorts Stick to Their Guns

The fiscal cliff looms and the daily risk on-or risk-off machinations continue, but it looks like the "apocalypse" trade may be coming off the table as shares of firearms manufacturers Smith & Wesson Holding (SWHC) and Sturm Ruger (RGR) have fallen 15% and 10%, respectively, over the past week. The stocks had incredible runs in the last year but there is still a 16% short interest in shares of SWHC, and a 43% short interest in RGR shares. It appears the shorts are sticking to their guns, and there has been minimal covering into the rallies.

SWHC/RGR Weekly Source: View Chart » View in New Window »

The weekly charts show RGR retesting the top end of an uptrending channel in place since July, and SWHC is nearing an uptrend line defined by lows over the same period. There may be multiple tops in place on both of the charts....225 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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