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Short Squeeze

Article Index

3 Nasdaq Stocks Headed for a Short Squeeze

By , Associate Editor, Money Morning • @DavidGZeiler -

Nasdaq stocks

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.

And while a squeeze is the short seller's worst nightmare, it can be a tremendous profit opportunity for everybody else...

Short Selling in 2015: Three Companies to Target

By , Associate Editor, Money Morning • @JimBach22 -

short selling

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...

The All-American "Short Squeeze" No One Else Sees

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

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."

And you can make a flat-out killing the moment it ends...

The Top 5 Short Squeeze Stock Plays Right Now

By , Associate Editor, Money Morning • @DavidGZeiler -

The potential for big, quick payoffs makes short squeeze stock plays an attractive strategy for investors savvy enough to find the right companies.

Of course, buying stocks that are heavily shorted - that is, a large number of investors have bet the stock will fall - carries substantial risk.

Shorted stocks typically suffer from one or more significant concerns about the company's business prospects.

Short sellers borrow stock and sell it at the current price, but are obligated to replace the shares they borrowed at some point in the future. If the stock falls, they profit.

But if the stock rises, and particularly if it rises quickly, the shorts stand to lose.

That sets up a short squeeze, with investors who are short scrambling to "cover" their positions and minimize losses before the stock goes any higher.

Of course, if a stock is heavily shorted, the rush to buy drives or "squeezes" the price even higher.

Investors who see a silver lining in a beaten down, shorted stock will buy in and wait for some good news to start pushing the price up, spooking the shorts into action.

Of course, that good news may never come.

That's why investors who want to use the short squeeze stock play must choose their targets carefully.

Here are Money Morning's five favorite short squeeze stock plays right now:

To continue reading, please click here...