Diana Containerships Inc (NASDAQ: DCIX) is climbing early on in the trading session this morning. While the company hasn’t released any news, there’s a good reason for the gains. Some of it is fundamental and some of it is technical. Today, we’ll talk about:
- Why DCIX is climbing;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why DCIX Is Gaining
As mentioned above, Diana Containerships is having a strong start to the trading session this morning, but no news has been released. So, what’s the deal? Well, it looks to be a classic short squeeze. Here’s what’s happening:
When you look at short interest on DCIX, you’ll see that it is very high. In fact, as of this yesterday, short interest was as high as 53%. Nonetheless, it’s a bad time to be a short on this stock or really any in shipping. That’s because President Trump recently announced the end of the Postal treaty. This ultimately gives shippers the ability to earn more money from shipments into the United States, especially from China.
This was the postive news that sent the shipping sector on a run for the top recently. However, as DCIX continues its run toward the top, shorts are getting more and more nervous. Think about it, with every penny gained is another penny lost for those on the short side of the coin. So, what we’re seeing is a stock that is experiencing dramatic gains as the shorts seem to be abandoning ship.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In the case of Diana Containerships, the news proved to be positive. Sure, it’s old news, but the end of the Postal Treaty could lead to stronger revenue for the company. As the gains from this news continue to rise, shorts are feeling pain and they continue to abandon their positions. As is normally the case, our partners at Trade Ideas were the first to alert us to today’s gains. Currently (9:33), DCIX is trading at $2.34 per share after a gain of $0.58 per share or 32.95% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to watch DCIX incredibly closely. In particular, we’re interested in following the company to see how it takes advantage of the changing tides in the shipping sector as the postal treaty comes to an end. We’re also interested in seeing just how high the stock is pushed in this short squeeze. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!