From the Desk of Steve Strazza @Sstrazza

As our Premium Members already know, we have a laundry list of scans that we run internally on an almost daily basis.

Different market environments, naturally, are more conducive to certain scans and less so to others.

We think our “Freshly Squeezed” scan is perfect for the current market. With so many individual issues in massive drawdowns as the broader market begins to turn a corner, there are going to be some serious short-covering rallies in some of the most beaten-down names.

In fact, it’s already starting to happen. Infamous meme stock, AMC Entertainment $AMC was up 25% at its highs today (not on a closing basis).

Our scan is quite simple. It is designed to identify stocks with heavy short positions. When a stock is heavily shorted, it means there are natural incremental buyers. Bulls need incremental buyers, as this is the only way price can move higher. When shorts are proven wrong, they have to buy their shares back to close out their position. 

We pair this short-interest data with short-term momentum overlays, as this is the match that is needed to spark a short squeeze. 

So without further adieu, let’s take a look at what’s popping up on our radar right now and outline setups in some stocks we think investors can squeeze profits out of in the weeks and months ahead.

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