BALTIMORE (Stockpickr) -- Now that 2010 is well under way, it's time to take a fresh look at large-cap stocks with serious short-squeeze potential.
Large-cap stocks fared well in 2009; the S&P 500 and Dow Jones Industrial Average, broad-based indices that track the largest stocks in the market, gained 27.8% and 22.5%, respectively. But with both indices down nearly 4% on the year already, investors are understandably concerned about the chances of seeing big-name stocks move higher this year.
Truth be told, much of that anxiety is misplaced; after all, stocks actually took a deeper dive during the first few months of 2009. And with most indices registering as oversold right now, the potential for big percentage moves on a short squeeze is strong.
A short squeeze -- the buying frenzy that ensues when a heavily shorted stock starts to look attractive again to investors, causing share price to skyrocket -- is just the catalyst these stocks need right now.One of the best indicators of just how high a short-squeezed stock could go is the short interest ratio, which divides shares short by average daily trading volume in order to get a ballpark estimate of the number of days it would take for short-sellers to cover their positions. The higher the short ratio, the higher the potential profits when the shorts get squeezed. Each week, Stockpickr creates a portfolio of stocks with high short interest ratios and the catalysts to trigger a squeeze. Here's a look at this week's potential plays, which focus on large-cap stocks.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV