30 Oct

DowDuPont’s Short Interest Trend before Its Q3 Earnings

WRITTEN BY Peter Neil

DowDuPont’s short interest

The latest short interest data as of October 15 showed that DowDuPont’s (DWDP) short interest rose on a sequential basis. According to the data, DowDuPont’s short interest as a percentage of outstanding shares was 0.88%. The short interest increased from 0.74% on September 28. During the same period, DowDuPont stock declined from $64.31 to $58.94.

DowDuPont’s Short Interest Trend before Its Q3 Earnings

The recent sell-off in the US market could result in negative sentiments towards the stock. As a result, DowDuPont’s short interest will likely increase. With the third-quarter earnings around the corner, traders will likely be watching the short interest. If the earnings don’t meet analysts’ expectations, DowDuPont could attract more bears. Analysts are already cautious about impairment charges of $4.6 billion that DowDuPont said will be reflected in the third quarter. Overall, the short interest trend could increase until the earnings are announced. Traders might initiate some short-covering since the relative strength index of 17 indicates that the stock has moved into the “oversold” position.

Short interest ratio for DowDuPont and its peers

In terms of the number of shares, DowDuPont’s short interest was ~20.3 million shares. DowDuPont’s average trading volume was ~9.4 million shares, which means a short interest ratio of ~2.2x. The figure indicates that it would take two days to cover all of its short positions. The short interest ratios for DowDuPont’s peers are:

  • Celanese’s (CE) short interest is ~1.97 million shares. The average number of shares traded is ~1.03 million. As a result, the short interest ratio is ~1.9x, which indicates that it will take two days to cover all of its short positions.
  • Mosaic’s (MOS) short interest is ~11.53 million shares. The average number of shares traded is ~4.07 million, which indicates that it will take three days to cover all of the short positions.
  • Eastman Chemical’s (EMN) short interest ratio is ~3.5x, which indicates it will take four days to cover all of the short positions.

Investors could hold DowDuPont indirectly by investing in the iShares Global Materials ETF (MXI). MXI invests 7.0% of its portfolio in DowDuPont as of October 29.

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