The best short squeezes happen when sentiment is thoroughly washed out, and it's difficult to picture a scenario where things can get worse.
This is the playbook we've followed for some of our best trades this cycle. Just look at how we nailed the bottoms in Carvana and Coinbase in late 2022.
We think Walgreens Boots Alliance is setting up for a similar face-ripping rally like those mentioned above, and here's why:
Walgreens Boots Alliance was added to the Dow Jones Industrial Average (DJIA) in 2018 and replaced General Electric. Less than 6 years later and over 60% lower, the eggheads at S&P Dow Jones Indices decided to give WBA the boot.
This removal coincided with the resolution of a multi-decade distribution pattern and an additional 60% downside in the following months.
Speculative technology stocks have been mooning in recent weeks. Many of these stocks have rallied over 100% in the last month alone.
Today, we're outlining a technology stock that rallied 700% in half a year after pivoting from blockchain infrastructure to high-performance computing. In other words, they pivoted from crypto to AI.
After consolidating for over a year, the stock put the finishing touches on a textbook basing pattern last week and is beginning a fresh leg higher.
But it's not just the chart that has us excited... the short sellers have gotten way too greedy, and we're going to exploit their weakness.
More and more stocks are completing primary trend reversals.
The most risk-on groups are leading the charge.
With this in mind, it's time for another Freshly Squeezed report.
Here's our approach:
We find the most heavily shorted stocks in the market. Then, we monitor these names for signs of upward momentum. Once that momentum kicks in, we ride them higher as the bears get squeezed.
We got fresh short data on Monday, so let's dive in and talk about it.
Our scan is quite simple. It is designed to identify stocks with the most aggressive short positions.
When a stock is shorted, it means incremental buyers are waiting in the wings...
The market keeps rewarding investors for buying some of Wall Street's most hated stocks.
We're getting buy signals from biotechnology and crypto stocks, which tends to happen in healthy market environments.
With this in mind, we're going back to the well and buying a biotech stock with nearly 1/3 of the float sold short and a double-digit days-to-cover ratio.
The stock we're buying is named after what was once an important ancient trade center in modern-day Turkey.
Let's talk about how we're playing this short squeeze:
We all know how dreadful it can be to get through airport security.
Clear Secure is trying to be the remedy by using biometric data to provide identity verification and expedite security at airports and other venues.
Last quarter, the stock rallied over 20% following its earnings report and has nearly doubled since.
Despite the stock's strong performance and highest price since 2021, the bears are still betting against it. The amount of shares held short is near its highest level in history.