By Fred Fuld

NEW YORK ( TheStreet) -- On July 15, Jim Cramer offered an explanation for the rally at the time in stocks such as Caterpillar ( CAT): a short squeeze. "We have seen this pattern a gazillion times," he wrote in his RealMoney blog. "The market gets rocked for four weeks, and suddenly the bears come out of the woodwork and begin to short everything that's not nailed down."

A short squeeze takes place when a heavily shorted stock is quickly bought back in by the short-sellers, driving the price of the stock up sharply. There are various catalysts that could trigger a short squeeze, including releasing an earnings report significantly better than analysts' expectations. So with many retailers reporting earnings in the upcoming weeks, including Wal-Mart ( WMT) on Aug. 13, Macy's ( M) on Aug. 12 and Abercrombie ( ANF) on Aug. 14, we thought we'd look for some interesting short-squeeze possibilities in the retail sector.

As for Cramer, he's recently found opportunity in the retail sector, based on a rally in the group earlier this month. "I like this rally," he wrote in his blog on July 14. "I think that gasoline's going to $2.20 -- and I think that money's going to go right into this group. It's a decent level to start buying. Best way to play is definitely Home Depot ( HD)!"

In addition to its weekly short-squeeze portfolio and article, Stockpickr has various resources available to investors seeking information about short squeezes. At Stockpickr's Answers forum over the past month, there have been more than 30 questions related to short squeezes. In Answers, Stockpickr members ( sign up here) can ask and respond to each other's questions, and experts such as David Peltier and Scott Rothbort visit regularly to pitch in their two cents.

Now, onto this week's retail short-squeeze ideas. These stocks, set to report earnings soon, have short ratios of at least 8, where the short ratio measures the numbers of days it would take the short-sellers to cover their position based on recent average daily volume. For reference, Wal-Mart has a short ratio of 2, American Eagle ( AEO) has a short ratio of 3, and Khol's ( KSS) has a 5.3 short ratio.

To read more, visit Stockpickr.com.
Stockpickr is a wholly owned subsidiary of TheStreet.com.

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