When do you use a short squeeze?

The short squeeze is my favorite trading setup, and it makes up a large percentage of my profits overall. But when exactly is it best to utilize a short squeeze?

My general answer is when the market is at highs. But how do you choose which short interest squeeze to take?

Here is my best recipe for a short squeeze…

1) Find a ticker that’s within a stone’s throw of a new, all-time high.

2) Pay attention to the short float.
– The tickers I choose usually have at least 10% short float, but preferable 20% or more.

3) Identify if there’s a catalyst.
– There are often clues right before the kick-off of a squeeze. The catalyst can be anything — but the most predictable one is consolidation right near the highs that then breakouts, hits the new high, and causes short sellers to cover. Earnings is also a great catalyst (both the report and then run into earnings).

Five Star Trader Tip: Always keep up with the news! If there are any tickers that hit the news, or otherwise have additional momentum due to retail traders or attention, makes for the best short squeeze.

Here’s a list of tickers I’m currently keeping my eye on:

  • BLNK
  • GOGO
  • GRWG
  • CHGG

What are some of your favorite short squeeze tickers?

2 thoughts on “When do you use a short squeeze?”

  1. Hello Danielle,
    I have been following you for quite a while and you have done an amazing job of teaching and guiding me and other traders in the trading room. So, thank you for your hard word and your knowlegde.
    You were mentioning about LikeFolio from the trading room yesterday and I am intereted in getting the service from LikeFolio. However, when I emailed the company to find out about the fee for an individual trader, I still have not heard from them yet. I then went on line and found out that they have a lifetime membership for $3995 plus a $299 annual maintenance fee. Is that what you have currently?
    Please advise.
    Thank you very much in advance,
    Tuan

    Reply

Leave a Comment

Up Next...

NVDA: The Gift that Keeps on Giving

Nvidia shares have experienced a meteoric rise, so all eyes were on its earnings report last week. Investors were not disappointed, as NVDA reported explosive growth plus a highly anticipated stock split. Why Stock Splits are Exciting NVDA’s reported 10:1 split will take place on June 10th, less than two weeks away! This event is … Read more

Read More

SPX 0 DTE: Part II

Hey traders! I posted a video on a neutral SPX 0 DTE strategy on Monday, and I had many questions, so I decided to do a follow-up video with a second example. In this video, I cover several questions, including the width of my iron condors, the length of time, the risk-to-reward, and more. Check … Read more

Read More

Trade Review: Using a Neutral 0 DTE SPX Strategy

  In today’s Trade Review episode, I cover a quick SPX 0 DTE trade from last Friday at market close. In this video review, I cover: Why I decided to make a bet that the market would trade sideways into the close How I analyzed the options chain and technical chart patterns Why I decided … Read more

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now
all-as-seen-on-logos