Below are a list of small-cap stocks that have been heavily shorted by the street, and should the market continue to rally, these stocks could see their share price launch into the stratosphere (if they haven’t begun so already) 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 these stocks, it could take as many as 55-60 days to cover all the shares held short in the individual stock.
Of all the stocks listed below, I am intrigued by RSYS as a breakout candidate, and may be tempted to put a position on with it. Others to watch is MINI which is forming a cup and handle pattern, and also watch for COBZ if it can break the long-term downtrend it is currently stuck in (close to doing so).
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.
Here’s the list of 20 Stocks.
