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Below are the charts of small-cap stocks that have been heavily shorted by the street, and should the market continue to rally like we are seeing here today, then these stocks could see their  share price launch into the stratosphere because of the bears being forced to cover their short positions in the stock. Based on the number of shares that are being borrowed, for some of the stocks, it could take as many as 100 days to cover all the shares held short in the individual stock.

If you don't know what a short squeeze is, that is where a stock starts to rise rapidly, and as the trend continues to escalate, the short sellers will likely want out. For example, say a stock rises 5% in one day, those with short positions may be forced to liquidate and cover their position by purchasing the stock. If enough short sellers buy back the stock, the price is pushed even higher.

Of the stocks mentioned below, pay close attention to Compucredit (CCRT) - just like last time. It has a huge short interest, but the daily volume is rather light, so wait for it to pick up some. Once it breaks through $3.61, it should really fly. 

First Bancorp Holding (FBP) has had a nice rally of late, and has pulled back moderately and consolidated nicely leading me to believe it is poised for another break-out higher here 

6 Stocks Ready for the Short Squeeze.

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ryan1Ryan (@shareplanner) specializes in swing trading strategies and is the founder of SharePlanner which he created to help and teach others on how to trade stocks better using multiple approaches and time frames. Each day you can count on Ryan to provide his trading advice as well as transparency in every trade that he makes. Ryan Mallory resides in Central Florida with a wife of seven years as well as one lively son. More >>

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