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Buy These 3 Stocks, Then Let the Short Squeeze Do the Rest

Technical strength will scorch the bears in CHK, DLTR and GRMN

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Dollar Tree (DLTR)

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Dollar stores and other discounters have made a quiet move back to their 2012 highs. Remember, these companies became one of the most loved groups of the 2012 rally as investors loaded up on these shares as the recession continued — right into their top in July 2012.

Now, a year later, dollar stores are trading back at their highs, and the shorts and analyst community continue to doubt their future.

With Dollar Tree stock set to move to new highs, the short sellers have increased their bets against DLTR by 356%, sending the stock’s short interest ratio to new highs. Earnings aren’t announced until Nov. 21, reducing the likelihood that a soft report will reward these bears. The last three months of the year are historically strong for the market broadly and retail stocks specifically, increasing the odds of a DLTR short squeeze ahead of its earnings report.

As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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