WINDERMERE, Fla. ( Stockpickr) -- With earnings season about to kickoff on Wall Street, it's time for market-players to create a powerful watch list of stocks due to report numbers that are also heavily shorted by the bears.
Short-sellers hate being caught short a stock that produces earnings that please the bulls. When this happens, we often see tradable short-squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.
This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns - the gains become so outsized in such a short timeframe that your profits add up quickly.
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