With over 10% of shares shorted, CHTR faces a high squeeze risk ahead of earnings. Positive returns could trigger a short squeeze.

Charter Communications (CHTR) is one of the few S&P stocks with more than 10% of its shares shorted, and only 63% of its shares are free-floating.

This short position grew in February when the stock lost a third of its value.

The position has remained relatively constant, first when the stock recovered and then again when it sold off. Thus, its neither bullish nor bearish.

The large short position causes the crowded or structural score to be near 70, which also means the squeeze score is at least 70.

The squeeze risk indicator adds to the stock return to this crowded score, so the score reached as high as 100 when the stock rallied in June and July

The short position did decrease after that, usually without the stock rallying; however, once in August, the stock rallied, suggesting a possible squeeze occurred then.

CHTR reports tomorrow and has recently moved both 16% up and down, but mostly down.

CHTR has negative sensitivity to earnings, both in terms of stock return and changes in short position.

CHTR’s short position and stock return are both negative, which is generally bullish, as the stock tends to revert, and the shorts tend to be right.

Taken together, when these events have occurred, CHTR’s returns have been positive.

If the stock moves positively, then the squeeze score could spike, signaling a possible short squeeze.

CHTR’s short position and positive squeeze risk signal possible gains post-earnings. Market participants should watch for any breakout.

Want to know more?

Access this data in real time using S3’s BLACK APP or Contact us to get started.