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
    • AI 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
    • Postcards
Login Archives 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
    • AI 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
    • Postcards
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: Options
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

Leave a Reply Click here to cancel reply.

You must be logged in to post a comment.

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

Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter

Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…

Claim My Free Report

Subscribe
Login
Notify of
guest

guest

0 Comments
Inline Feedbacks
View all comments


Latest News

September 15, 2023 • By Shah Gilani

We're Headed for a Second Banking Crisis - Here's What to Do

September 14, 2023 • By Tom Gentile

Tulips Are the Secret to Trading the Next 300% Rally in AI

September 14, 2023 • By Chris Johnson

Tulips Are Telling Me How To Trade the Next 300% rally in AI
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 Penny Hawk Midday Momentum
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Quantum Data Profits Flashpoint Trader Darknet Alpha Accelerators Brutus Alerts Resource Traders Alliance L.A.U.N.C.H. Investor Rob Roy Trader Long-Term Equity Profits

© 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