Updated from 11:10 a.m. EDT

According to Jim Cramer, we're seeing the flip side of a turn in housing. "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 RealMoney blog, "so you have a real chance to see multiple expansion and 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 eBay ( EBAY), which has a short ratio of 2.5; Qualcomm ( QCOM), with a short ratio of 1.8; VMWare ( VMW), with a short ratio of 3.6; and Yum! Brands ( YUM), which has a short ratio of 2.3. Tomorrow sees reports from Amazon ( AMZN), with a 2.8 short ratio; Fifth Third ( FITB), which has a short ratio of 1.4; Microsoft ( MSFT), which a short ratio of 1.4; and Netflix ( NFLX), 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 top financial short-squeeze plays, all of which have market caps of more than $500 million.

To read more, visit Stockpickr.com.

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