DELAFIELD, Wis. (Stockpickr) -- Nothing is better than waking up to a fresh short squeeze in the morning on Wall Street if you're long the stock getting squeezed. The taste of victory for the bulls is something to savor when you know there are a ton of bears caught on the wrong side of the trade getting squeezed. The profits add up quick.
Just take a look at the short squeeze we saw in Green Mountain Coffee Roasters (GMCR) last week after the company report earnings and a new partnership and investment from Coca-Cola (KO). Shares of GMCR skyrocketed higher as the shorts were squeezed from under $85 a share post-earnings to its new 52-week high on Thursday of $122.38 a share. That's a monster squeeze that certainly was painful for anyone who was caught betting against shares of GMCR.
Since the prevailing trend right now in the stock market is up, I think it's as great a time as any to scan the market for stocks that are heavily shorted. These are the names that could be setting up for the next GMCR-type short-squeeze. All we need is for a few hedge funds and large traders to decide that it's open season on squeezing the bears and off to the races these stocks could go. Trends like this can develop very quickly in strong uptrending markets, since the bulls know it can be much easier to force the shorts to capitulate.
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With that in mind, here's a look at five stocks that could be setting to squeeze the shorts.