Investors can find treasure among Nasdaq stocks in some unlikely places.
Like heavily "shorted" stocks, for example. Short sellers bet that a stock will fall in price.
But short sellers can be wrong. If a stock goes up, they take a loss. If the stock rises rapidly, it creates a "short squeeze," forcing short sellers to buy shares quickly before the price goes higher and they lose more money.
Investors can find treasure among Nasdaq stocks in some unlikely places.
Like heavily "shorted" stocks, for example. Short sellers bet that a stock will fall in price.
But short sellers can be wrong. If a stock goes up, they take a loss. If the stock rises rapidly, it creates a "short squeeze," forcing short sellers to buy shares quickly before the price goes higher and they lose more money.
We may still be in a bull market, but the ground is becoming more fertile for short selling.
At some point, the market is going to catch on as to why the markets have been surging so high for so long - years of money-printing by the world's central banks. That means now is a great time to look for short selling candidates.
And here are three stocks ripe for short selling right now...
GameStop stock (NYSE: GME) is a short selling favorite, and for good reason.
It's trying to navigate an online-centric marketplace as a physical retailer, and the short bets are playing off this knowledge to mount a strong position against the company.
But trying to profit off GME's downfall has proven harder than anticipated. Here's why...
This bull market has been raging on for five years, but the most savvy short sellers have found incredible profits.
You see, even when everything is going up in the market, there are still companies that are overvalued and have seen share-price losses this year.
In fact, short selling these five companies has been the right move in 2014...
Everyone knows the U.S. housing "recovery" has been resurrected on slippery ground. But now that we're finally about to slip - big time - no one sees it coming...
Then again, how could they?
The numbers are incredibly misleading...
According to the Commerce Department, new residential home sales in July fell a whopping 13.4% from their June sales pace. And sales in April, May, and June were all revised significantly lower.
Yet according to the National Association of Realtors, existing home sales (completed transactions that include single-family homes, townhomes, condominiums, and co-ops) increased 6.5%... to a seasonally adjusted annual rate of 5.39 million in July, from a downwardly revised 5.06 million in June.
On the surface, the divergence is confusing. But not when you look below the surface, where the real money gets made.
As you'll see (before anyone else), the housing "recovery" is just one giant "short squeeze."
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