4 Stocks Set to Rally in a Short Squeeze

These stocks could make big moves higher if they get squeezed

   

4 Stocks Set to Rally in a Short Squeeze

Trading short squeezes can be fun and the upside potential is huge. A short squeeze occurs when a poorly performing stock builds up a large percentage of traders holding the stock short. When short sellers expect stock to keep falling, they sell the stock by borrowing it from their broker, and then buy it back later for a cheaper price. A squeeze is triggered when the stock suddenly starts to rally and these short sellers have to buy back early to cover losses, which squeezes (increases) demand for the stock and can accelerate the stock’s rise in price over the near term.

Traders can make a killing if they go long a short squeeze, but keep in mind that these stocks are held short for a reason. Keep your positions small and make sure you understand the risks of trading against the trend before you enter a trade like this.

Here are four picks we are watching for potential moves in the very near term.

NuVasive, Inc. (NASDAQ: NUVA) — up 2.66% today

 4 Stocks Set to Rally in a Short Squeeze

Skechers USA (NYSE: SKX) — up 7.24% this week

 4 Stocks Set to Rally in a Short Squeeze

Cree, Inc. (NASDAQ: CREE) — up 4.1% this week

 4 Stocks Set to Rally in a Short Squeeze

China-Biotics Inc. (NASDAQ: CHBT) — up 2.27% today

 4 Stocks Set to Rally in a Short Squeeze

This article is brought to you by LearningMarkets.com.


Article printed from InvestorPlace Media, http://investorplace.com/2010/11/4-stocks-set-to-rally-in-a-short-squeeze/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.