NEW YORK (TheStreet) -- Markets have a 76% probability of rising in December because of the "Santa Claus rally" effect, and that could lead to a rise in a few technology stocks with high short ratios.
According to Birinyi Associates, since 1990 the S&P 500 has risen an average 2.2% from Black Friday to the end of the year. That could be a benefit to owners of technology stocks with high short positions as shorts are forced to cover their positions.
A short squeeze takes place when a stock that has a high short position sees the shorts start to cover their shares and buy them back. As this scenario plays out, more shorts start to cover and the share price continues to climb.
The short-to-cover ratio indicates how many days based on average daily volume it would take all of the shorts to cover their shares and buy them back.There are several scenarios for a short squeeze, including the year-end melt up across the major indices. There are also issue-specific reasons, including earnings, a new product, management changes, or positive analyst coverage. Here are five technology stocks with very high short interest.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV