$BOT at $21.60: a squeeze I have to be talked into

I'll start with the part that bothers me. $BOT is a name people will call a squeeze, and the squeeze-risk reading is 4 of 100. The shorts-pressing reading is 99 of 100. Those two numbers disagree with each other, and I think the second one is telling the truth.

So I'm leaning bullish, but with my arms folded. The lean is to the upside because the short base is real and shrinking, and a stock with 975K shares short can move hard when the wrong people get nervous. Nobody has been made nervous yet.

The shorts are not hiding

At $21.60, down 4.9% on the session, with volume at 0.1x normal, there is nothing violent happening. Market cap is about $556.1M, small enough that a few motivated sellers or buyers change the picture fast. Days to cover is 3.8. Short interest has already dropped 36.1% since the last report, so some of the pain has been taken.

Here's the odd bit. Only 54% of off-exchange volume printed as short sales, against a normal 64%. That is less shorting than usual, not more. Yet the pressing score is pinned. I read it as shorts who sold into every pop and see no reason to stop. Lazy volume, but not careless.

Why I don't trust a bounce yet

Smart-money read is distribution at 100 of 100. Buyers pushed 21% net flow and price barely moved. That is absorption, and the size on the other side was selling. Dark pool DIX is 38%, leaning sell, and the sheet calls this a weak tape that shorts are leaning on. It scores a trap at 73.

Structure doesn't help either. The last change of character was down, at 22.64. Overhead there are bearish gaps at $22.06, $22.52 and $22.71, a staircase of supply a rally has to chew through. The nearest dark pool level, $21.76, shows buys of 0k. Nothing is defending the floor except price.

The daily candles are spinning tops and a long-legged doji in a flat trend. Indecision. Nobody owns this chart yet.

The bull case

• Short interest down 36.1% already
• Shorts pressing into strength can flip to covering
• Clear trigger and a defined $19.44 exit
• Bullish crowd at 48 of 100

The bear case

• Smart-money distribution at 100 of 100
• Absorption on 21% net buying
• Last CHoCH down at 22.64 with gap supply overhead
• Squeeze risk only 4 of 100

What would make me a buyer

Not the short interest. Heavily shorted is not a thesis, and I won't pretend it is. I want a close above the recent high on rising volume. That is the trigger, and it has to be real volume, not another 0.1x afternoon.

Then I want confirmation: a second day of 54%-plus short volume with price refusing to fall. Shorts pressing into strength and getting nothing for it. That is when a trap flips around. Crowd sentiment is already bullish at 48 of 100, so I'm not early to a lonely idea, and I'd rather be a day late and right.

Where it runs and where I'm wrong

The scenario target is $34.81, a gain of 61.2%, over days. That is where covering runs out of sellers to meet. It's a big move for a quiet tape, and I know it. Dark pool is quiet too, 47% off-exchange with no blocks of 10,000+ shares or $1M+, just small prints that look like internalized retail. Insiders are silent. Market backdrop is neutral with a bias of -7, so no help from the index.

I'm wrong at $19.44. A close back under the 20-day average with short volume drying up would tell me the shorts had it right all along. Then I step aside and let someone else argue with the distribution.

Kill switch

Any one of these and the thesis is over, no averaging down, no renaming it.

• Close under $19.44
• Close under the 20-day average with short volume drying up
• No close above the recent high on rising volume
• Short volume stays at 54%-plus while price breaks lower

Bottom line

This is a conditional long, not a hold-your-nose buy today. The setup needs the tape to turn on the shorts before I put money behind the story. Until it does, I'm watching the recent high and the second day of pressing.

The desk leans bullish. Bull or bear, the kill switch above is what keeps either call honest.

Sources and further reading: SEC EDGAR filings for BOT · FINRA daily short sale volume files · Nasdaq short interest: BOT · RoboStrategy, Inc. Common Stock investor site · BOT quote, chart and data on StockMarketLoop.

Data as of Oct 20, 7:39 AM ET from the Making Easy Money Academy data desk: options positioning, FINRA short volume, the off-exchange trade record, the structure map, SEC filings and the ticker's headlines. Vaughn McNair and the Making Easy Money publication may hold or trade positions in the names discussed. This is speculation and education, not financial advice.