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Shortsqueeze

The end of an eraFor years short sellers had their fun. They do fundamental research, short, and then let everyone know. They don't hold back on fear mongering. And this worked for years. But nothing works forever. The US are entering bubble area and money is being thrown at stocks left & right. Massive & highly advertised short positions lead to short squeezes, and it is happening more frequently. It had to backfire eventually. The price of GME rallied after the WSB forums decided to aggressively buy if you didn't know. Laws on market manipulation are not very clear, what WSB did might get considered illegal or it might not. Regulators might try coming up with something against it, or maybe not since they only act when price went down, if price went up (legally or not) they never care. As everything else this won't work forever, regulators or not, I would be surprised it worked more than a few times. I am seeing people say "learn a lesson that you should never short anything", that's a pretty "dumb money" thing to say. What I would get out of this is don't ever get complacent, and avoid something if too many people are doing it/know about it. GME short interest was over 100% and they screamed on roofs they were all in short. Really asking for it... It's always fun to try and catch the market peak and with all the taxi drivers giving people stock tips it might not be very far, but there are a lot of variables, and I do not think it will be obvious (maybe it will). Maybe cautious Wall Street guys will give up and just end up going all in with leverage. I could not tell if the top is months away or years away, maybe it goes back and forth with a China culture war to replace the trade war fluctuations. We might not get a clean top and crash at all, but rather something really choppy and bad, or the price could keep going up like the Venezuela, Argentina, and Zimbabwe stock markets. Crash while going up. A possible good play some might want to consider is to short the more bad companies (that are not crowded, nice and under the radar), and buy the better ones. When the crash comes these shorts would cover losses. Forex has been quite a choppy unpredictable mess for me for the past 3 months, maybe everyone is too busy getting into crypto & stocks? Follow the money. Follow the whale. The casual retail millenial whale. Until they run out of money. I don't think we are at max euphoria yet, but it can't be very far.
NYSE:GME
by MrRenev
9
How far can AMC go?Kicking myself a bit for not picking up NYSE:AMC on Friday following my own potential short squeeze research. AMC along with many others definitely showed up in the stocks with the highest float short. But... "a stock is never too high to buy". If you zoom out the chart it's clear that AMC is just now starting its proper Daily Ichimoku breakout. There are clear price inflection points at $10 and then $20. With the crazy meme momentum going on this week anything is possible!
NYSE:AMCLong
by norok
12
Should I Buy GME Stock Right Now?I’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Let’s talk about GameStop GME because the stock’s gone absolutely crazy. I mean, yesterday, January 25th, it was up 144% before swinging into negative territory. Then it reversed again and closed up more than 18%. And today, it’s up another 22% to trade at $93.50. One month ago, it was trading around $20! So, today, I want to look at exactly what’s happening with GME, and let you know if it looks like a good time to buy the stock. What is Happening with GME? GME made its first big move in mid-January after adding Ryan Cohen to its board. This guy is the co-founder and former CEO of Chewy CHWY — the online pet supplies store — so he knows a lot about retail. The stock jumped from $20 to above $40 when that news hit, and this caught a lot of short-sellers off-guard. In fact, according to one CNBC article I read, GME is the most heavily shorted U.S. stock. The article states, “GameStop has been a popular short target on Wall Street. In fact, more than 138% of its float shares had been borrowed and sold short, the single most shorted name in the U.S. stock market.” What’s a Short Squeeze? For those that don’t know, short interest is when a trader bets against the stock, meaning they want it to go lower. To do this, they’ll borrow shares from their broker at one price. If the stock price falls, they can buy the shares back at a lower price to repay their broker and keep the difference as profit. But if the stock rallies, short sellers will have to buy back the shares at a higher price to limit losses. For stocks that are heavily shorted, this can create a sort of ripple effect: Because how do you close a “short trade”? Well, you SOLD the stock earlier so now you have to BUY it back. So when more shorts start covering, i.e. BUYING, the stock climbs higher and higher. This is the short squeeze. And in GME’s situation, as the stock rallied on good fundamental news, shorts started to cover. Then the Reddit crowd got involved. There’s a forum on Reddit called “WallStreetBets”, and their purpose is to, “make money and being amused while doing it.” Their words, not mine. As GME was rallying, online traders on Reddit began posting about the stock and buying it to manipulate the shorts. And as they bought the stock, the price soared, forcing more shorts to cover their positions, and again: This means that more people are BUYING. It’s not surprising there are a lot of traders upset about this manipulation. Famous short-seller Citron Research is one of them and said it would no longer comment on GME because of the “angry mob” on Reddit. Is GME a Buy or a Sell? Now, you could make an argument for GME stock to keep going higher. There are probably some shorts still hanging on. And fundamentally, the company did report solid holiday same-store sales and digital sales growth a few weeks back. But in reality, it’s dangerous to trade GME right now. For starters, look how overbought this stock is. And a lot of times, when these stocks fall, they fall fast. Remember Eastman Kodak KODK last summer when it went from $2 to $60 in two days. And then back down to $6 a month later. And implied volatility is all over the place. This means options premiums are crazy high right now for options buyers. But it’s not a good time to sell options, either, because it’s hard to pinpoint levels of support or resistance. So, yes, you could have made a lot of money trying to trade GME stock, but you could’ve lost a lot of money, too. And whenever I see a parabolic move as we’ve seen in GME , I leave it alone. The risk is simply not worth it. Because at some point, the Reddit traders might lose interest in this stock. So they would just sell it and move on to the next stock, and that could make the stock crash. After all, there are 2.3MM people in this group! More Stocks to Watch Before we go, I just want to check out some more of these “short squeeze” stocks that have been volatile this week. The first is Palantir PLTR , which ran from $26 to almost $40 in two days. Today, the stock is down 3% at $35.12. Another is BlackBerry BB . BB stock ran from $7.50 in mid-January to above $20 yesterday — its highest level since 2011. Today, the stock is up 3.6% at $18.60. And here’s Bed Bath & Beyond BBBY , which was trading around $18 earlier this month, but hit a three-year high near $48 yesterday. Today, BBBY is up 0.1% at $30.68. Finally, there’s AMC AMC . It was trading below $2 at the start of the month and hit a high of $5.19 earlier today. While I’m not going to be trading these stocks because of the risk involved, I’ll certainly be keeping my eye on them.
NYSE:GME
by rockwelltrading
4
🚀P🚀L🚀T🚀R🚀 - Mission Still a Go 🌝I did not expect the red day on Friday. But my theory stands. I’m even more confident about this move. There was a gap up due to hype from Cathie Wood buying, but the bears in the pennant pushed it back. PLTR is still consolidating and building pressure within the pennant and I expect a breakout to the upside next week. Side note: there is LOTS of open interest and volume in deep OTM calls for the end of January 👀 WSB note: The short squeeze is happening next week on GME. Margin calls on the shorts are coming in hot, and brokers are struggling left and right and some have even BLOCKED SHORTING on GME, while the SEC has implemented the Up-Tick rule. Where do you think they are taking their profits to? 🚀🚀🚀🚀🚀🚀🚀PLTR🚀🚀🚀🚀🚀🚀🚀
PLong
by ChigzTrades
[WSB] How To Trade The Actual GME Short-Squeeze #2Friends, as you already know, the GameStop Stock (GME) was recently picked up by the subreddit r/wallstreetbets. The theory and technicals, which led to our entry at ~$17, are explained in the previous idea i shared with you guys (linked below). The price respected the trendline (black) three times during this uptrend. We saw a retracement in the shape of a cup each time, followed by another breakout. The same thing happend before, while the price was moving in a parallel ascending channel (red). For whatever reason, the price pumped 57.17% each time. So we can say that the price of GME tends to move in some sort of patterns. Let's try to apply these patterns to the current situation and find the best possible entry for those who missed to pump or for those want to increase their position size. From a technical point of view, we would like to see the price re-testing the trendline. This usually happens during a pullback. Pullbacks occure after a strong breakout. Those who previously bought (f.e. in the past months) take their profit and new traders emerge on the market - the journey continues. We can see a new trend emerging, which might be moving more aggressive. Please be aware that during an actual short-squeeze, we see insane price-jumps and huge sell-off later. Please manage your risk accordingly. Let me know what you think about this idea! I would love to hear your feedback. cheers, Ares
NYSE:GMELong
by Anton_XBT
14
What is a short squeeze? How to trade a short squeeze?What is a short squeeze? A short squeeze is a short period when the price of a security increase rapidly due to the demand greater than the supply available for that security. A short squeeze is due to short-sellers covering their positions and long traders looking for a bargain. How to trade a short squeeze? A common shape of a short squeeze is an "inverted J" shape. The straight-line of the inverted J pattern is due to aggressive buying by the bargain hunters and short sellers covering. The hook shape of the inverted J is formed due to the profit-taking of the short-term traders. A trader can trade in the direction of the "inverted J" shape. What are some of the reasons one may fail to trade this pattern? Possibly due to failing to identify a correct bottom before placing a trade. Possibly a temporary bottom was identified, but the downtrend continued and trapped the traders. Thank you for reading! Greenfield Remember to click "Like" and "Follow!" Disclosure: Chart interpreted and article prepared by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
BITSTAMP:BTCUSDEducation
by GreenfieldAnalysis
8
LET GO INTO THE MIND OF SHORT SELLERS!LET GO INTO THE MIND OF SHORT SELLERS! Short-sellers borrow a security and sell the security into the open market at a high price and expect to buy it back eventually at a lower price and will profit the difference as a capital gain. Short-sellers watch the security and wait for an opportunity to initiate their trade. Short sellers place their bets when the security price is most vulnerable. Short sellers know when to stay out of the market. They stay out of the security when the security's price is going higher. Short selling happens quickly and hard because they have a loan that must be repaid; therefore, they must cover their short position quickly. They short sell when the long-term investors are fearful, restless, when the long-term investors are weak and when unexpected news is announced for example like a bad earning report. Short sellers also enter the market when long traders liquidate their position to take profits. On Dec 9, 2020, I published an article claiming that TSLA Telsa, Inc makes a high that week to $652.32 and stated I think the stock is due for a short-term correction soon because the price is moving too fast. Indeed, TSLA Telsa, Inc. had a quick correction. The short-term correction is visible on the hourly chart of TSLA Telsa, Inc above. The stock opened on Dec 9, 2020, with an all-time high of $653.28. The stock price quickly dropped to a low of around $606.48 as of the market close on Dec 9, 2020. The next day on Dec 10, 2020, the stock hits the low price of $566.34. 11.13% profit for short sellers in one day is not bad. This is a perfect example of short-sellers shorting a stock and long traders profit-taking causing the stock price to drop significantly. On the same day, the stock reversed direction and continued higher and closed the day at $627.07 (as of market close on December 10, 2020). The combined actions of short-sellers covering and long traders looking for a bargain quickly reversed the short-term correction and the price of TSLA Telsa, Inc continued with the current uptrend and closed today at $694.78 (as of market close on December 30, 2020). Thank you for reading! Remember to click "Like" and "Follow!" Happy New Year! Greenfield Disclosure: Chart interpreted by Greenfield. Just a market opinion by Greenfield Analysis LLC for only educational purposes. This is not a recommendation. Greenfield Analysis LLC has no investment in any of the securities mentioned in the article, and no plan to initiate a trade in any of the securities mentioned. Greenfield does not receive any compensation for this writing. Investment involves substantial risk. You should consider carefully before making an investment. Investment at your own risk.
NASDAQ:TSLA
by GreenfieldAnalysis
4
Christmas Rally Short SqueezeI get it, Peleton is a hot stock and seems like a great product during the 2020 pandemic/ Bullmarket boogaloo. But, if you heard about a stationary bike company that was valued at 40 BILLION dollars any other time you would not want to become a new investor. I expect this stock to continue to do well this December due to Holiday shopping season and Fed QE . But, as the world population becomes vaccinated and Life returns to some sort of normalcy, this should slowly fade away. Of course the market is always forward looking, so I expect a pullback from a double peak chart pattern in January. TA interpretation + Personal Opinion = not investment advice* Best of Luck!
NASDAQ:PTONShort
by kingmidasLXIX
3