Technicals shaping up for a breakout, page-46

"Clearly the lender of the shares would need to be "long" the stock to consider lending shares to short sellers under the most basic mechanism of the short selling process or else they will have entered the lending arrangement with the expectation of losing money. This is just basic logic. This would actually imply that 100% of the register is long and holding unless the owners of the lent stock can actually extract more rent than the shorters can make by successfully short selling the stock, which seems unlikely or involving more complicated mechanics around the counter party arrangements of lending out the stock. Esh"

I think my above statement needs a little qualification.

The portion of the register that is represented by lent shares is long and holding but to say they are "long" might be misleading. They are longer than the people who are borrowing the shares from them to short, ie their expection of future price decilne is less than that of the shorters or they are viewing their investment over a longer time frame, ie they are happy to earn rent from the shorters even if their bet with them goes wrong because they have firm expectations that the share price will be higher in the long term and are willing to hold.

On that basis, and if we assume that the shorters aren't criminals acting on inside information, then about 94% to 94.5% of the RSG register is on average long and holding and the remianing 5.5% to 6% is longer than the shorters.

The current chart price action isn't screaming any major warning bells either IMO, with some consolidation off the Nov 2018 low. Esh