BALTIMORE ( Stockpickr) -- Some of the best opportunities for market profits are found in contradictions.The end of 2010 gave investors a broad-based rally for stocks, as indices such as the S&P 500 gained 24% in the last six months. In the process, scores of heavily shorted stocks have seen their share prices rocket as stronger fundamental numbers and overall bullish sentiment ruled. But at the same time, many of these rallying stocks saw short-sellers increase their bets against them. That's a major market contradiction -- and it's one that could provide us with some potential short-squeeze plays in 2011. A short squeeze is the buying frenzy that ensues when a heavily shorted stock starts to look attractive again to investors, causing share price to skyrocket. One of the best indicators of just how high a short-squeezed stock could go is the short interest ratio, which estimates the number of days it would take for short-sellers to cover their positions. The higher the short ratio, the higher the potential profits when the shorts get squeezed. Related: 4 S&P 500 Stocks Poised to Rebound To find these plays, I relegated my search to heavily shorted stocks that have made consistent gains over the course of the last 52 weeks. Naturally, these three plays aren't without their blemishes -- there's a reason that these stocks are being heavily shorted. But for investors looking for exposure to a speculative play with a beefier risk/reward tradeoff, these could be powerful upside plays for the coming year. With that, here's a look at uptrending issues with short squeeze potential in 2011.
Twitter and become a fan on Facebook.