Strazza and I did The Flow show earlier this week in which one trade that stood out and caught my interest was a juicy short squeeze candidate.
Checking back on it today, the stock still maintains a short position greater than 20%. That means more than one-fifth of all shares outstanding are held by people with a short position. And if this stock starts busting higher, the only way traders holding a short position can end the pain is to buy the stock.
This can potentially fuel a rapid rise in share prices (see: Gamestop $GME circa early 2020).
I'm certainly not calling for a repeat of past meme stocks short squeezes here, but in this case, we've got a stock that's chart is in the middle of completing a beautiful base and short holders are no doubt keeping their fingers near the trigger to exit this position quickly if we see some follow thru to the upside.
That creates opportunities for us.
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