Short sellers betting against Cramer picks

Many traders review short interest for added insight each month. Interestingly enough, many traders bet against Jim Cramer picks and they do so with short selling. The truth is that just because a pundit of any size adds a large percentage gain to a stock, it actually doesn't change the fundamentals. It does however raise the interest in the issue.

So, we all know that many traders love to pick on Cramer. Here are some interesting points on Cramer's ongoing picks for 2007 and looking at the short selling trends from May to June (2007):

Level 3 Communications, Inc. (NASDAQ: LVLT) was Cramer's top speculative pick for the year: June short interest was 119.9 million shares, up 9.7% from the 109.3 million shares short in May.

Savient Pharmaceuticals (NASDAQ: SVNT) was Cramer's top speculative biotech pick this year: June short interest was 7.95 million, up 6.6% from 7.45 million shares short in May.

Nastech Pharmaceuticals (NASDAQ: NSTK) was another fairly recent Cramer biotech pick, which was a biotech zombie he thought would turn around: June short interest was 5.09 million shares, up 21% from the 4.2 million shares short in May.

As a reminder, short sellers often have many reasons for short selling. Sometimes it is a pure bet against a company, just as it would seem, other times it might be as a hedge in an upcoming event or a hedge for an options trade. But out of these, you know there have to be some of the shorts selling the stock just because they don't like the Cramer plays.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.