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3 Stocks to Buy on Short Squeeze Hopes

The setup is just right for a boom -- increasing short interest despite a pretty technical picture

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Short sellers have begun accumulating bets against the market over the last few weeks as the market continues its tightrope walk across new all-time highs. From an overall perspective, sentiment remains far from pessimistic as we’re beginning to hear analysts and market commentators suggest that the market can do no wrong. This, of course, puts us on alert for more broad market selloffs that could lead to darker days.

short squeeze stocks to buy
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That said, the latest short interest data reveals a growing number of stocks that continue to see what we would refer to as “healthy” short interest patterns — the kind that result in bullish short squeezes or rallies.

As always, we scan more than 7,000 companies for technically strong stocks to buy that are seeing increases to already high short interest. This “setup” is often the profile of a potential short squeeze candidate.

Expect moves higher in any of these names to act as a trigger for the shorts to start buying the shares back to cover their positions — something that benefits the wise traders that position themselves ahead of these likely moves.

As always, we like to identify a few stocks to buy given their standing as potential short squeeze candidates:

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