If you own a stock, then you’re only promising to be a future seller one day. But if you’re short a stock, then you’re a guaranteed future buyer.
The only way to unwind a short position is to buy the stock back.
The more short sellers there are in a stock, the more guaranteed future buyers… That’s dry powder for higher prices.
When you take the total number of shares that are short, and divide that by the average daily volume, you can calculate how many days, at the average daily volume, it will take for all the shorts to cover their positions.
The more number of days (the “short ratio” as we call it), the more vulnerable that stock is for a short squeeze.
When all the short sellers are covering at the same time, buying back their stock, while natural buyers are still there accumulating, that’s when you get the “Squeeze” higher, where stocks go parabolic.
The Freshly Squeezed Scan is specifically designed to isolate those opportunities.
For the purposes of this Special Report, we are focused on only the Small-cap version of the Freshly Squeezed Stocks. So we’re only looking at companies between $1-10 Billion in market-cap.
Now let's dive in and discuss some of our favorite long setups!
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