I am sure you know what a short squeeze is, but in the rare case you don’t, or more importantly, aren’t profiting from them, pull up a chair.
A short squeeze usually arises in small cap stocks with small floats. When a stock begins to advance swiftly, the trend may continue to escalate because the short sellers will likely want out.
A perfect real example was my LOCM trade last week. But before we go into detail on LOCM, let’s examine the anatomy of a squeeze first.
Consider a stock in an overall downtrend for well over a month. Say the stock rises 5% in one day, followed by 2%, and 3% the next day. Now up 10% from its bottom, those with existing 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. As the momentum builds, daytraders arrive on the scene as well.
Now the trick to quick and easy profits is to position yourself before the squeeze, which is simply a matter of experience, education and yes, instinct.
A perfect example of this was my LOCM trade last week. Not only did my members and I lock in solid gains on this trade, but we did so in under four days with relative ease.
Instead of writing about it, I decided to include the video I did for my subscribers after I locked in over $6k in profits. Keep in mind, almost all of my subscribers did better than I which you’ll see in the video. This is the power of being positioned before a squeeze and better yet, the pattern happens each and every week, just gotta know where to look.
To watch in HD, expand the video and select 720p…