There’s a real summer vibe going on in the stock market right now — meaning it’s not doing much… The S&P 500 is trading sideways within 20 basis points up or down the second week of June. I keep hearing whispers about stocks with the most short squeeze potential, but there’s no divisive buying or selling of risk assets, and no real macro movements have come across my radar.
But there is something that’s been working out well for traders, apparently: the short squeeze play.
My long-term readers might remember a couple of months ago when I went through my Bloomberg terminal to show you how I can spot short squeezes in advance. I went through my process of figuring out what other investors are looking at, and if certain stocks are worth the investment in the long run.
Today, I want to revisit the subject because short squeezes are one of the only things that is moving the market forward, and it seems to be all people are talking about.
Wall Street may not look like it’s doing a whole lot right now, but if you start peeling back the layers you’ll see this massive game being played with shorting stocks.
And if we can figure out which stocks investors want to squeeze next, there are a ton of profitable opportunities to take advantage of.
I have a short interest scanner on my Bloomberg terminal I use to sort out stocks primed for a short squeeze in the Russell 2000.
I like to organize these stocks by the percentage of their float. A float is the total number of shares a company issues of its stock that investors are able to trade publicly.
A nifty little thing my scanner does is take a float percentage of how many traders are shorting the stock right now, as compared to the entire float of shares that are trading outside of the treasury of the company.
And I’m seeing a lot of interesting names pop up — specifically Workhorse Group Inc. (Nasdaq: WKHS), Bed Bath & Beyond Inc. (Nasdaq: BBY), Revlon Inc. (NYSE: REV) and Petmed Express Inc. (Nasdaq: PETS).
One of these stocks is even part of my June Monthly Money Flows Elite trades.
But these aren’t the only stocks in the Russell 2000 that could be primed for a short squeeze… I found 14 more stocks with major short squeeze potential on my scanner.
Check out our short video below to learn more about the stock with the most short squeeze potential in the Russell 2000, and be sure to share your thoughts in the comments section below.
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