Below are a list of small-cap stocks that have been heavily shorted by the street, and should the market or the individual stock start rallying, could really see its share price launch into the stratosphere because of the bears being forced to cover their short positions in the stock. Over the past couple of weeks we’ve seen a lot of stocks doing this. Based on the number of shares that are being borrowed, for some of these stocks, it could take as many as 50 days to cover all the shares held short in the stock.
If you don’t know what a short squeeze is, it 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 15% 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 listed below, I particularly like CADX, which has a nice inverted head & shoulders pattern recently confirmed, and all things seem to indicate this stock is headed much higher.
Here’s the list of 9 Stocks.