Updated from 11:10 a.m. EDT
According to Jim Cramer, we're seeing the
. "There's been so much stock bought back, and this administration doesn't like naked shorting," he wrote in an April 17 post to his
blog, "so you have a real chance to see multiple expansion
a short squeeze."
A short squeeze occurs when short-sellers quickly buy in shares of a stock in order to cover their bearish positions, driving the price of stocks up sharply. The ratio for measuring short-squeeze opportunities is the short ratio, which is the number of days it would take the short-sellers to cover their positions based on recent average daily volume.
Especially during earnings season, it's a good idea to keep an eye on which stocks are being heavily shorted and could surge higher on a surprise earnings beat. With that in mind, stocks reporting earnings on Wednesday include
, which has a short ratio of 2.5;
, with a short ratio of 1.8;
, with a short ratio of 3.6; and
, which has a short ratio of 2.3. Tomorrow sees reports from
, with a 2.8 short ratio;
, which has a short ratio of 1.4;
, which a short ratio of 1.4; and
, which an 8.8 short ratio.
One of the most heavily shorted sectors is the financial sector, which is certainly creating some interesting potential short-squeeze plays.
Stockpickr has compiled a portfolio of the
, all of which have market caps of more than $500 million.
To read more,
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