Short Squeeze

Short selling, as many of you are already aware of, is when investors are betting against a stock by selling borrowed shares in hopes of buying them back later for less. Usually, this is a negative sign which correlates to a drop in the price of a stock. On rare occasions, though, intrepid investors can take advantage of this short-selling to their advantage.

 You see, because short sellers eventually have to buy back shares in order to flatten their positions, high levels of short selling could represent an opportunity to you. The slightest bit of good news could send the stock soaring as short sellers scramble to buy back shares. This is known as a short squeeze.

 According to the Wall Street Journal, these eight stocks have been the subject of unusually heavy short selling:

TDSC ABM BIOS CAB DW GXP HURN MWY

 Of these eight, I personally see GXP as the most viable. Being an electric utilities company, a purchase now while the stock is at a 3-month low could mean strong gains in the near future. To me, this company seems to be a relatively safe bet, and I’ll keep looking into it. Till then, good luck and happy trading.

PS  O ya. Check out our new banner made by yours truly. Hope you guys like it. I’d like to say that’s why I haven’t posted in so long, but its really just because I’m getting lazy.