Click to Enlarge Wall Street tends to migrate to the ends of the market-capitalization spectrum when they talk about stocks.
You know what I’m talking about: “Large-Cap Movers!” or “Small-Cap Breakouts!”
But what about the “in between” group: midcaps?
The midcap universe — as measured by the iShares Core S&P Mid-Cap ETF (IJH) — is up 21% year-to-date, right between the 24% returned by small caps and 18% for the S&P 500, meaning midcaps are ripe with trading opportunities for those willing to look.
From our perspective, there’s no better way to look than researching the short interest activity on this robust group.
By July’s close, IJH’s stocks (roughly 400 companies) saw a roughly 1% decline in short interest as short sellers continue to get squeezed out of their positions with the market’s resilient move higher. On the aggregate, it would appear the short squeeze opportunities are slimming, but when you drill down to the company level, there are plenty of good finds.
Currently, there are 35 companies with short interest ratios at their highest levels for the last year, 16 with ratios higher than 9, indicating that there’s a higher probability of a short squeeze rally. The table above (which you can click for a full view) identifies 10 of these “stuck in the middle” squeeze opportunities, but we want to dive deeper into three specific midcap picks: