(Note: The Fly is out of pocket today. He will be back shortly).
On the eve of every mook in the Tri-State area heading either down the Jersey shore or out to the Hamptons, doing his best hybrid imitation of Joe Pesci in Goodfellas and the “The Situation” at the dance club, it is only appropriate that traders consider getting a little trashy too. After all, if there is ever any part of the year when you can get away with playing trashy little biotechs, rare earths, and heavily-shorted small caps, it is during those low volume holiday trading types of sessions.
Here are my best “trashy” stock ideas:
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Serious question… How do you determine where a short squeeze begins and which stocks are likely to experience one? I ask because I’ve noticed the universal trend to justify long positions with the magic words, “short squeeze”. We heard that earlier this year for every Chinese lotto stock out there. The only squeeze that materialized was a long squeeze.
Right–it’s a good point. Basically, I am looking for a technically impressive chart. The short squeeze just adds fuel to the fire on the upside, since you are catching the numerous bears in the name “out of position” on a chart with solid price action and volume.
I understand the concept and mechanics of a squeeze of course, but ASTM for instance had plenty of sellers (who may or may not have been opening a short position) earlier in the year at prices 20-50% higher than current prices. They are a long way from being forced to cover to avoid a loss. (Now CBST looks like a whole different story. If I were short I would be beginning to panic!). However, I think the short squeeze thesis is both unscientific and way overused.
Perhaps, but the chart is constructive and the issue is not being forced to cover so much as some of them getting a bit panicky.