Cove Reflections: Float Runner Short-- DG FastChannel, Inc

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- 2010
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Float Runner Short-- DG FastChannel, Inc

DGIT [NASD]
DG FastChannel, Inc.
Services \| Business Services \| USA

Posted on the Forum "Pincher Plays" on 9/01 Click Here to Follow Thread

Early, immature Pincher begnning to setup that has some interesting and overall short-term dynamics in play:

Bullish Factors:
1. Bullish TA (see annotated Money Flow chart below; Click Here for Live Version )
2. Bullish TOR and Float Analysis to create a Short Squeeze environment (presented below)
3. Bullish Options Acty in terms of volume and call:put ratio
4. Positive News WRT considerable Share buyback authorization ( Read News )

Negative Factors:
1. Short Interest > 18% and Float Analysis suggests a possible 3-5% increase this period (presented below)
2. Fundamental Decay given the lowering of Q and Full Year Guidance (
Case Laid Out Very Well Here )
3.Insider Selling-- althoughsporadic, consistant (and August is somewhat suspicious to the timing of guidance SEC Form 4 Filings )

Neutral Factor: Lower Float = Higher Volatility. Currently Bears have a lock, but may have over-reached.

Options Option : Sept $17.50 Calls (Expire at close Friday, September 17, 2010):

9/3 Last: 0.35
Volume: 315
Open Interest: 2,046
Rho: 0.00
Vega: 0.01
Theta: -0.02
Gamma: 0.16
Delta: 0.29
Implied Volatility: 65%

Short Interest:
Assume 8/31 report will show an increase Short Interest equivalent to the avg of the last 5 reports (Short Interest Trend = 21.67%
Short Projected = 5.749M
Short % of Float Projected = 21.95%

Float Analysis:
TOR: 22.03% (desired above 3%)
Reported Float: 26,190,000
8MA: 5,770,000
WF: 18,671,720
EF: 48,882,563
%EF of Reported: **186.65% (desired above 30%. **When the Effective Float is > 100% of the Reported Float, there is an equity issue-- Naked Shorts or Dilution are the typical culprits.)
Short Interest: 18.08%%
Short Ratio: 3.80 (desired above 3)

Day TOR: 9.66%
Day Volume: 2,530,000