Overall, shares continue to trend higher with buyers constantly keeping a bid in the name. This was part of its corporate restructuring, which the company announced in September. In turn, this can trigger what is referred to as a short squeeze and result in massive gains in a short period of time. Following that post I referenced in the first paragraph, shares rallied as much as 19.8% that day. For American Airlines to work as a short-squeeze candidate, one of these three catalysts (and preferably more than one) needs to be sustainable. As long as the shorts continue to dislike this name and as long as it continues to deliver strong results, short squeezes will remain possible. This forces them to buy back their shares around the same time, quickly pushing the stock price up much higher. 0. He obtained his Masters Degree In finance (MS – finance) from ICFAI. Retail has been a very difficult area to invest in for several years now. Travel stocks and energy names have had a rough 2020. Nasdaq A squeeze occurs when you have a stock that has attracted numerous short sellers. Reddit's forum WallStreetBets has made it tough to be a short-seller these days. There are dozens of ways to pick stocks, but few have been as unconventional -- or as successful -- as the coordinated short-squeeze being deployed by Reddit’s army of day traders. In these kinds of circumstances, short sellers get squeezed from their positions and can incur losses. But should shares break out, it could force sellers to buy back their short positions. Since the beginning of the year, Gogo shares have plunged 70%, and the stock has a 69.98% short float. On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. SunPower is actually a stock I highlighted on Twitter (NYSE:TWTR) for its short squeeze potential. The next worst sector performance? Last, the company shut its Dressbarn chain amid struggles. And while energy doesn’t get the headlines that some of the more popular names do, could these dogs have a big move in 2021? It’s been maximizing its in-store utilization combined with online sales and curbside pickup. This is the latest accepted revision, reviewed on 1 March 2021. The short squeeze isn't a new market phenomena. FuboTV (FUBO). Short squeeze stocks can present a massive opportunity for certain investors, especially now that markets are experiencing volatility because of COVID-19. The company is a specialty retailer that deals in shoes, apparel, and women accessories under the Premium Fashion Segment, which includes LOFT, Lou & Grey, and Ann Taylor. It’s certainly food for short … er, thought. And while the stock is out of favor now, once it finds its footing, it could setup for a potent move to the upside. The company operates around 2,800 stores in the US, Puerto Rico, and Canada, as well as e-commerce websites. However, when the situation is better than expected, it’s not uncommon for these stocks to begin a sharp rally. Revenue of $6.12 billion came in ahead of expectations by more than $275 million. That doesn’t mean we’ll get it. When the economy comes back to life, so will demand for energy. Last month, the company said that it will furlough its retail workers and 50% of its corporate employees, and will also slash executive salaries by 50%. With a market capitalization of $4.3 billion, it’s far from a micro cap. So, with all of that in mind, let’s look at seven of the best stocks to buy that are enjoying or could enjoy a real short squeeze: Now, let’s dive in and take a closer look at each one. The cause is usually an unexpected rapid increase in the stock price, forcing short sellers to cover their short positions by buying back shares of the stock. Best Short Squeeze Stock List for You: Ascena Retail Group Inc. (NASDAQ:ASNA) Ascena stock has a 36.05% short float. Moreover, the company generated cash flow of more than $750 million and reduced its overall debt by about $500 million. Under new leadership from CEO Mark Tritton, the company has been leveraging its omni-channel operations. Short Selling Stock Cons Some of the short selling stock cons include: You take a big risk on trusting your instinct that a stock value will fall soon. Stitch Fix has already begun a short squeeze of its own. Usually, when a company issues its stock for the first time, shares are put in lockup to prevent flooding the market by big shareholders, which can bring down the price. Any good news can trigger the short squeeze. In other words, it is trending higher, just looking for a break over resistance. Like American Air, Virgin Galactic stock has also shown investors why it can be one of the best stocks to buy when it comes to short squeezes. In the last four quarters, the company has beat consensus revenue estimates three times. Real estate, down just 6.2%. There is also the Plus Fashion Segment (Catherine’s, Cacique, and Lane Bryant), as well as the Kids Fashion Segment for tween girls. Pull up a chart that shows the beginning of 2020, For the year, shares are still down more than 50%. In 2019, the company signed a merger deal with Privateer Holdings; part of the agreement required the floatation of more shares that required to be locked. At the time, Rite Aid was just a small pharmacy player being squeezed by its competition and the looming entrance of, In the release, Rite Aid reported Q3 earnings of 8 cents per share, crushing estimates by 58 cents. When Rite Aid reported earnings on Dec. 17, 2020, the stock again looked like it was about to run, climbing 31.5% at its highs. Health Insurance Innovations Inc (NASDAQ: HIIQ), $129.6 million short interest, 72.9% of float. However, when a stock ignites higher, these can be some of the best stocks to buy. A short squeeze can be a catalyst for a huge breakout. A short squeeze drives a stock's price up as short-sellers bailout to cut their losses. American Airlines has already shown why it can be one of the best stocks to buy for a short squeeze. Another biotech stock that catapults higher on Reddit call is INO stock. For the year, shares are still down more than 50%. Digital sales also rose 89%, while margins improved. The company spent billions on its buyback in what was ultimately a horrible, multi-year decision. And when demand comes back for energy, it should send this sector high. Currently, he serves as a financial consultant and technical analyst at Tradersinsights.com. And the stock rallied for 12-straight sessions as a result. Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. When a short-seller wants out of their position, the are forced to “buy to cover” — that is, a buy order to cover their short position. However, American Air is also an interesting name to keep an eye on because of the “reopening trade.” Simply put, airlines, casino stocks and other travel-related names are prone to big pops when tied to the coronavirus. Even the one “down week” in that run resulted in a weekly loss of just 0.35%. Short Interest plays a powerful impact on the order flows that can surge into the stock market. The list of short squeeze stocks has also been updated as of Jan 2021. Short sales have an expiration date, so be cautious not to be caught having to cover at an undesirable price. If an investor can predict a short squeeze before it happens, they may be able to get in early and reap the benefits of the upward momentum of the stock. Real estate, down just 6.2%. From my data model's perspective, a stock becomes a short-squeeze candidate when three criteria are met. 1125 N. Charles St, Baltimore, MD 21201. More than 100% of GME's outstanding shares were sold short! The company has entered into an agreement with institutional investors for the exchange of $495 million of the 4.875% outstanding Senior Notes due this year for new 10% Senior Notes expected in 2025. What happened during the short squeeze in 2008? When an investor is bearish on a company, they can sell the stock short. It designs and sources network solutions that enable internet connections in aircraft, and it also develops software and platforms for the aviation industry. With an intense 51% short interest, SunPower has the potential to really squeeze higher. It’s up 73% from Dec. 4, a day before it reported first-quarter earnings. What Did the Stock Market Do Today? A short-squeezing melt-up doesn’t even need a fundamental reason either, making selling short any stock a dangerous proposition that could lead to more than just the loss of one’s shirt. GameStop short squeeze. This is how a short squeeze works. Investors can try following this short squeeze stock list to get in before it’s too late. Sometimes, a shorted stock can surge abruptly, which will force short sellers to exit their positions, thus putting more upward stress on that stock. The next worst sector performance? Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Churchill Capital IV Will Likely Create Shareholder Value, In a Year, You’ll Be Glad You Bought Plug Power Stock Today, How Crypto Startup HUMBL Became the Top Penny Stock of 2021, 7 Robinhood Stocks To Buy for Your Penny Stocks Portfolio, Dogecoin Is Fully Capable of Going ‘Whale’ Hunting. So of all the stocks on this list, Virgin Galactic goes to show just how powerful and how much longevity some of these moves can be. That pop was helped fuel by true buyers who wanted to own the stock and short-sellers buying to cover their position. However, full-year guidance came in, Bret Kenwell is the manager and author of, 10 Stars Jumping on the SPAC Mergers Bandwagon >>> READ MORE, Louis Navellier and the InvestorPlace Research Staff, Luminar Stock Could Soar More Than 100% From Here. Stocks with high short interest are often very volatile and are well known for making explosive upside moves (known as a short squeeze). All rights reserved. This was before we entered our new world of Covid-19. Some traders trade only stocks with a high potential for a short squeeze. So, with all of that in mind, let’s look at seven of the best stocks to buy that are enjoying or could enjoy a real short squeeze: Bed Bath & Beyond (NASDAQ: BBBY ) Stitch Fix (NASDAQ: SFIX ) At the time, Rite Aid was just a small pharmacy player being squeezed by its competition and the looming entrance of Amazon (NASDAQ:AMZN). In these kinds of circumstances, Best Short Squeeze Stock List for You: Ascena Retail Group Inc. (NASDAQ:ASNA), Best Short Squeeze Stock List for You: Tilray Inc. (NASDAQ:TLRY), In the past three weeks, Tilray stock has gained over 155%, and the company has a short float of 49.22%. That was a six-fold increase in the stock from the low to the high. And in order to sell a stock short, one must borrow the shares. However, short sellers will want to be careful not to get caught in a short squeeze, or else they may incur losses. The list of short squeeze stocks has also been updated as of Jan 2021. A short squeeze accelerates a stock's price rise as short-sellers bail out to cut their losses. S3 Partners highlights three stocks on its list of 200 names with short-squeeze pressure. However, there has been some life lately. Some stocks such as Wynn Resorts (WYNN) spiked 28% in a single day, Live Nation, which owns Ticketmaster soared 15% higher, AMC Entertainment (AMC), the movie theatre chain, skyrocketing 51%. ASNA stock is up about 7% this morning, but down about 88% year-to-date. Following that post I referenced in the first paragraph, shares rallied as much as 19.8% that day. Remember, when someone goes short a stock, they borrow the shares. Short Squeeze Stocks, Stocks to Buy 3 Popular Robinhood Penny Stocks to Buy Under $5, 3 Silver Penny Stocks to Consider Adding to Your Portfolio Right Now, 5 Hot Robinhood Penny Stocks to Buy This Easter, Low Float Stocks 2020: 5 Companies in the Spotlight in April, 3 Silver Penny Stocks to Buy in June 2020, Copyright © 2021 | Disclaimer | Terms of Use | Privacy Policy. This was before we entered our new world of Covid-19. In the most famous of the r/WallStreetBet short squeezes, GameStop share prices went from $17 around the new year to $348. In other words, it is trending higher, just. Recently, the company reported its Q4 results in which it posted a loss of $0.28 per share relative to consensus estimates of a $0.49 loss per share. In fact, over the past year, energy is down 37%. The Best Short Squeeze Stock List for You. In the release, Rite Aid reported Q3 earnings of 8 cents per share, crushing estimates by 58 cents. On Monday, the company saw its stock price close 33.02% higher. That's because I own three stocks that could be next on the short-squeeze list: insurance company Lemonade (NYSE: LMND), plant-based meat company Beyond Meat … Collectively, Virgin Galactic is a great speculative stock for investors betting on space travel and high-speed technologies. Short-Squeeze Trade Lags: Here Are 2 Names on My List Professional hedge fund managers adjust very fast, and they've done a lot of unwinding in order to restore flexibility. Well, with a … That much isn’t clear at the moment. It’s one of the only groups that have not had a sustainable recovery. This month shares in online travel agent Webjet (ASX: WEB) have climbed around 10% as online trading communities seek to replicate the “short squeeze” that pushed GameStop’s stock up from less than US$20 a share in mid-January to a dizzying US$347.51 on the 27 January. Copyright © 2021 InvestorPlace Media, LLC. And there was plenty of tinder on hand heading into the fireworks. The company could soon see more shares hitting the market after it released 11 million shares from lockup. You see, bears sell stock short for one reason, which is that they believe the share price should go lower. However, it’s still small enough for bulls to move if they step in with force. When too many people short sell stocks, it can drive the overall stock market down. . Shares went from about $7 in December 2019 to more than $40 per share two months later. In the stock market, a short squeeze occurs when there is a lack of supply and an excess of demand for shares of a stock. The inflight internet company provides broadband connectivity products and aviation services. So if the price of the stock increases, the short seller would have to go to the open market and buy whatever shares are available in order to close out their position. 1125 N. Charles St, Baltimore, MD 21201. The company owns several subsidiaries involved in the development, manufacturing, marketing, and distribution of pharmaceutical therapies and products. Like American Air, Continental Resources and other energy names are a play on an economic rebound. He has worked for almost a decade on several financial projects related to the stock market news, fundamental research and technical analysis for several websites. But that’s not what happened. This is a huge step that will give the company breathing space as it seeks to steady its finances. The company reported revenue of $221.31 million in the quarter, beating consensus estimates by 6.91%. However, when the stock is rallying sharply because of true buyers, adding these additional short-sellers’ buy orders to the mix only adds fuel to the fire. With a 32% short float, this stock is on the list of potential squeezes. The company indicated that its distribution will be open but operating at a limited capacity. The stock continues to run into resistance in the $19.50 area, but has put in a higher low. The stock has a 59.22% short float. Why? A squeeze is a phenomenon that can occur after big gains happen in a stock that, in turn, cause mounting losses for short sellers who are forced to cover their positions. INO is one … Article printed from InvestorPlace Media, https://investorplace.com/2020/12/7-best-stocks-to-buy-for-a-potential-short-squeeze/. The stock has a short interest ratio of 6.0 or higher. When cases start to die down, positive talk about the vaccines pick up or travel trends increase, American Air and its peers quickly come back in favor. In the past three weeks, Tilray stock has gained over 155%, and the company has a short float of 49.22%. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. All rights reserved. That short covering volume contributes to the rising price, and the short squeeze can accelerate quickly.S3 Partners analyst Ihor Dusaniwsky recently compiled a list of stocks … A combination cord-cutting and sports betting play, it’s no surprise retail investors … Like American Air, Virgin Galactic stock has also shown investors why it can be one of the best stocks to buy when it comes to short squeezes. Based in India, Ankit is a financial content writer and stock market analyst. >> 5 Healthcare Penny Stocks Making Big Moves This Week. quotes delayed at least 15 minutes, all others at least 20 minutes. Over the past weeks, Mallinckrodt stock has gained almost 90%. In fact, we saw it in 2008 with Volkswagen stock. Thus, keep it on your radar. The company could soon see more shares hitting the market after it, Best Short Squeeze Stock List for You: Mallinckrodt plc (NYSE:MNK), The company has entered into an agreement with institutional investors for the, Best Short Squeeze Stock List for You: Gogo Inc. (NASDAQ:GOGO), Recently, the company reported its Q4 results in which it posted a loss of $0.28 per share relative to consensus, 5 Stocks With a Short Squeeze Indicator on April 1, 4 Tech Penny Stocks to Buy in a Recession, 5 Tech Penny Stocks Under $5 to Buy on April 8, Top 5 Biggest Penny Stock Gainers This Week to Buy, 5 High Volume Penny Stocks to Buy (or Avoid) This Week, 5 Low Float Penny Stocks to Watch in April, short sellers get squeezed from their positions, 5 Healthcare Penny Stocks Making Big Moves This Week. Because of what we refer to as a short squeeze. Sometimes, a shorted stock can surge abruptly, which will force short sellers to exit their positions, thus putting more upward stress on that stock. 2021 InvestorPlace Media, LLC. As the stock begins to move higher, more and more of these short sellers will hit their stops. ; S3's Ihor Dusaniwsky notes Virgin Galactic Holdings (SPCE-1.6%) has a large short … Some stocks such as Wynn Resorts (WYNN) spiked 28% in a single day, Live Nation, which owns Ticketmaster soared 15% higher, AMC Entertainment (AMC), the movie theatre chain, skyrocketing 51%. , SunPower has the potential to really squeeze higher. Another group that is exposed to periods of intense pessimism — solar stocks — the industry can have some of the best stocks to buy for short squeezes. However, that marked the stock’s 52-week high for a year. The stock continues to run into resistance in the $19.50 area, but has put in a higher low. However, there has been some life lately. Let’s back it up a bit though and go back to December 2019. April 8, 2020

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