I've been using short interest data to crush the markets for 20 years now, but every fresh bi-weekly print is still a thrill.
What can I say? The promise of a fresh payday- it's exciting.
I love this data because it's a truly "ambidextrous" indicator; it's good for picking stocks and lining up trades in rising and falling markets.
And in any kind of market, you can use it to determine where to "squeeze" profits from. Short interest shows us the percentage of the public float of shares currently being shorted.
It's simple: A higher level of short interest means more people (and by "people," I mean big hedge funds and institutions, really) are betting against the stock, aiming for it to fall.
But if it rallies higher, these players will be forced to buy back the stock and "cover" their short positions at higher and higher... and higher... and higher levels.
All you have to do is be there as they cover and bid up the stock, and you can make out like a bandit.
It's as easy as that. Today, I'm going to show you how it's done and share what I think is this month's richest target...
Rather than hog all the fun for myself, I'll show everyone exactly how I go about making these picks. You don't have to be a quantitative analyst like me; the "legwork" is easy - shockingly easy. In fact, I'm surprised more people don't use this data.
REVOLUTION! Regular investors have been able to turn the tables and take Wall Street to the mat recently because of these situations. This is perhaps the market's hottest trade right now...
Once you've got all three covered, it's time to get into the stocks before the squeeze starts and the short sellers start pumping the stock higher as they fight to buy the shares back to close their losing positions.
Short interest data reveals that these 11 stocks are getting ready to breakout.
But, to make this really easy, and to absolutely maximize our chances of taking down gains, I've picked the best one...
And that's the Carlyle Group Inc. (NASDAQ: CG). Incidentally, I discussed the Carlyle Group during my Night Trader livestream a few weeks ago, ahead of their earnings.
The shares had just bounced from support at their 20-day moving average, and the same pattern is getting ready to happen now.
The Carlyle Group is best known as a private equity firm that has built a huge portfolio of companies across all sectors and business lines - we're talking government contracting, communications, agribusinesses, and financial services, just to name a few.
Last quarter's earnings beat analyst estimates while the company provided positive guidance. Shares rallied a fast 10%. Since then, the stock has pulled back to technical support at its 50-day moving average, and now shares are switching back into rally mode.
Recent short interest activity on the stock saw a slight increase, which took the short interest ratio to a reading of 6.7. That reading, combined with the bullish 50-day moving average, builds a bullish short squeeze case for CG shares as they begin to rally again.
The stock is trading at $36.54 as of midday March 12, 2021, and the shorts should start to unwind their positions by buying the stock as it moves above a trigger price of $38.25 - that's less than 5% higher from here. I'd put a short-term target of $43.00, which could land you nearly 18% in profits in short order.
There are all kinds of ways you can play a stock like Carlyle that could be about to explode higher. It would certainly be easy to buy the stock and ride it higher. But I think you'd be shocked at how easy it is to really boost profit potential with options trading - maximizing gains potential from thousands of different stocks. I'm talking about the chance to add thousands to your account in a matter of days or weeks. I know a guy who's releasing his next "Super Options" research recommendation this week - learn how you could get it.
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