3 Stocks Just Itching for a Short Squeeze

Their technicals are great, but short interest is high ... and something will have to give

    View All  

Click to Enlarge
Short sellers are back on the job.

The latest short interest report shows an increase of 3.7% on S&P 500 companies — the largest increase since February 2013. The increase in short interest suggests that traders are setting-up for a short-term decline in prices as one of the more volatile months of the year — October — approaches.

The additional short interest makes some sense considering that many factors are suggesting a short-term lull for the market, but as always, a number of companies have short interest that appears to be way too bearish, setting them up for a potential short squeeze.

Short squeezes occur when a heavily shorted stock rallies higher, forcing the traders to cover or close their short positions by buying shares back. The ironic twist: Those short sellers end up creating more buying pressure to move the stock even higher.

Our scans identify stocks that remain in a technically strong pattern while seeing increases in already high short interest, resulting in stocks that have a higher likelihood of seeing a short squeeze rally. The accompanying table identifies the top 10 S&P 500 companies likely to see a short squeeze, and we’ll take a closer look at three:

Article printed from InvestorPlace Media, http://investorplace.com/2013/09/short-interest-short-squeeze-oke-hog-ups/.

©2016 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.