Here’s The Next GameStop-Style Short Squeeze

So, by now we're all at least somewhat familiar with the GameStop Corp. (NYSE: GME) story, or drama, or saga, or circus – whatever you want to call it, a huge group of small, retail investors bet bigger on GameStop and demolished some huge hedge funds that were betting big against GameStop.

But the folks from the WallStreetBets sub-Reddit didn't pull off this underdog victory by getting lucky – in fact, I'm thinking they were probably looking at some of the same data I can see and using it to crush the opposition.

I mean short interest.

It's a phrase you've probably heard flying around a lot the past few days, and having this information is, as GameStop shows, an extreme edge. It's hands-down one of my favorite indicators, like a neon sign that says "big money ahead!"

person using MacBook Pro on table

Image Source: Unsplash

WallStreetBets knows it, and now you know it.

And I'm going to use short interest to give you the names of twenty companies, any or all of which could be the next high-profit rocket ride…

Short Sellers Are (Usually) a Bull's Best Friend

Twice each month, my database grabs short interest data, hot off the presses from each of the stock exchanges. 17,000 data points hit the ol' hard drive in less than one minute in one of the most exciting times of the month for me.

You can use short interest to pinpoint impending, probable big moves in stocks. We're not necessarily talking GameStop big, but then again, the last few days have shown it's not impossible.

First, let's talk terminology. When I "short" a stock, it means I've bought or recommended a put option that will increase in value as the stock price moves lower.

Short sellers operate a little differently, though. They sell short for a variety of reasons, for hedging, or if their fundamental analysis points to lower prices. But sometimes… in rare cases, they're just betting on the chances of a stock simply dropping to zero.

1 2 3 4
View single page >> |

Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.