Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)

Email this Article

Send with mail | ahoo instead.
Required Needs to be a valid email
Required Needs to be a valid email
This "Short Squeeze" Options Trade Could Pop After Feb. 11
https://moneymorning.com/?p=1175166
Required Please enter the correct value.
Twitter
Stocks: AAPL, CC, GME, TSLA

This "Short Squeeze" Options Trade Could Pop After Feb. 11

By Money Morning Staff Reports, Money Morning • January 28, 2021

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

So far, 2021 is already shaping up to be great for traders. Two days after the Nasdaq and S&P 500 reached all-time highs, the bears ravaged the market for its biggest loss in three months on Wednesday.

Short-sellers are getting crushed, and even some the Big Tech leaders - like Apple Inc. (NASDAQ: AAPL) and Tesla Inc. (NASDAQ: TSLA) - are in play with huge moves higher and lower.

In other words, volatility is back, and that makes this a great market for options traders.

Not only that, but earnings season is here, and that is usually a major catalyst for stocks. One of the themes Money Morning Quantitative Specialist Chris Johnson has identified for this season is the rebuilding of America.

And nothing supports that effort like the raw materials industry...

New Extra Income Hack: This could be your shot to collect $1,000 to $5,000 a week - regardless of how volatile the markets are. WATCH NOW.

The basic materials sector is at the base of the economy, providing the steel, chemicals, copper, and other raw materials everyone else needs to make and build things, including infrastructure. Top on Chris' list is chemicals maker Chemours Co. (NYSE: CC).

When I talked to Chris this morning, the first bullish indicator he noticed is how quickly CC stock is accelerating above its 50-day moving average.

The best part is this is all happening just ahead of Chemours' next earnings report scheduled for Feb. 11.

The $30 level is critical because it has turned back the bulls on several occasions. Strong earnings will make $30 per share for CC look cheap. Buyers are likely to flood in and run the price higher.

In the news over the past week has been short-sellers in formerly mundane stocks, creating something called a "short squeeze."

This is a condition where stocks that have been heavily shorted - in other words, a lot of big bets have been made that the stock prices will drop - start to rally.

This creates a feedback loop whereby the short-sellers, seeing mounting losses, are forced to buy back the shares they borrowed to sell. That pushes the price higher, forcing even more short sellers to buy.

You get the picture. Think about what has been happening lately to GameStop Corp. (NYSE: GME). The stock has gone from $20 per share to as high as $483 in just a few days.

The problem with shorting stocks is that there is unlimited downside. That's why short-sellers can get into a panic if the market moves against them.

While Chemours may not be as heavily shorted as GameStop, it does have a fairly high level of shares sold short. That means if it can break though the $30 level, all of that short covering (buying) will kick in and light a touch under the stock.

Toss in positive fundamentals, and Chris thinks this can be a big winner.

Of course, we can boost that return even more with options...

The Best Options Trade Now

Join the conversation. Click here to jump to comments…

Login
guest
guest
0 Comments
Inline Feedbacks
View all comments
LIVE
Visit Money Morning Live


Latest News

January 19, 2023 • By Money Morning Stock Research Team

These Stocks Could Go To $0

January 9, 2023 • By Money Morning Stock Research Team

The Government Is Pouring $391 Billion Into These Stocks - Buy Now

December 27, 2022 • By Money Morning Staff Reports

6 IPOs in 2023 You Can’t Afford to Miss
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover This Is VWAP Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Warlock's World Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Flashpoint Trader Darknet Hyper Momentum Trader Alpha Accelerators Weekly Profit Cycles Brutus Alerts

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz