3 Stocks Primed for a Short Squeeze

Let the bears' folly line your pockets in coming weeks

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3 Stocks Primed for a Short Squeeze

ShortSqueezeStocks 300x178 3 Stocks Primed for a Short Squeeze
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The market heads into the year’s final few weeks looking like it’s setting up for a classic “Santa Claus rally.” The biggest potential driver of such a rally could very well be some swelling bearish sentiment, which could lead to a short squeeze flurry.

Wise traders eventually learn that the best time to sell stocks isn’t when everyone is screaming like the market is inches from the cliff, but instead when they’re acting like that cliff is just a crack in the highway. The former situation currently is in force, which means investors should be looking for technically strong stocks that the market is bearish toward — these are the stocks most likely to scale the “wall of worry” and result in a short squeeze higher.

There’s no better set of data to find candidates that match this profile than the most recent short interest data. As a reminder, short interest goes up on a stock as traders bet against it, so high short interest is a sign of a wall of worry. We target stocks that are in strong technical trends, as these are the ones that the shorts are often wrong on, sparking a powerful short squeeze here and there.

The accompanying table displays the most heavily shorted stocks among the S&P 500 that are trading in a technically strong pattern. That list is a great starting point for traders looking for a short squeeze candidate, but we want to take a closer look at three stocks:


Article printed from InvestorPlace Media, http://investorplace.com/2013/11/3-short-squeeze-crm-gme-ilmn/.

©2014 InvestorPlace Media, LLC

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