These Five Stocks Are Nearing Their Short-Squeeze Rally Trigger Point

Turn those machines back on!”

Mortimer Duke was in a fury when he screamed these words near the end of the 1983 film, Trading Places, as his brother lay on the floor suffering what appeared to be a heart attack.

Why was he so enraged? He was the victim of one of the best-known short squeezes in history.

Every time I watch that movie, I find myself yelling at the TV screen. Because Eddie Murphy and Louis Winthrope III’s characters, like most people, didn’t know that you can actually use a short-squeeze to your advantage.

You get the angle here, yes?

Short squeezes follow the simple rules of supply and demand. They occur when there is a lack of supply and an excess of demand for a stock, and it typically causes a fast and aggressive increase in the share price.

A short squeeze happens when short sellers – those who are bearish on a stock – are forced to “cover” their losing positions on a stock. This leads to an unusually high increase in buying volume, driving the stock price up.

Typically, a short squeeze is triggered when a stock’s price has rallied to a point where short sellers begin to feel the pressure of margin calls against their accounts. Sometimes it’s even simpler than that, and short sellers decide to simply cut their losses and get out as the stock moves against them.

In an ironic twist, “getting out” is done by buying shares of the stock that they were betting against by holding a short position. Even more ironic, many times, the stock is trading with increased volume during these short squeezes.

This means that the short sellers must fight to get the stock as it accelerates higher – just like the trader fighting his way into the pits in Trading Places.

It all ends up with a stock typically making an unusually fast move higher…

A move that generates big profits for those of us that can find the short squeeze before it happens.

Today, I’m going to show you how to find these short squeezes – plus, five stocks about to hit their own short squeeze rally – so that you can be on the receiving end of those profits…

This Precious Metal Stock’s “Silver Cross” Is Signaling a 30% Payday

In the sometimes-complicated world of technical analysis, it often pays to just keep things simple.

That’s why I spent the morning checking the list of companies making technical moves as their patterns grow stronger. And the simplest way to do that is to scan my database for stocks completing a silver cross.

A silver cross occurs when a stock’s 20-day moving average crosses above its 50-day moving average.

Most traders have heard of the golden cross instead. It’s similar, but it’s signaled when a stock’s 50-day moving average moves above its 200-day moving average.

In both cases, the bottom line is the same – a shorter-term trendline crosses above a longer-term trendline. Usually, this signifies a transition from either a correction or consolidation into an uptrend.

Typically, a silver or gold cross is a bullish catalyst for the stock.

My database models scan for gold and silver crosses each day to find stocks moving into Wall Street’s “fast lane.” But as a trader, I’m more interested in silver crosses than gold.

Why? Because they’re more likely to develop into better, faster gains.

While the “cross” puts a stock on my radar, I learn everything that I need to know by putting eyes on the charts – and following two simple rules.

In fact, my database found three stocks with a silver cross today.

But only one follows my rules – and it’s signaling a 30% payday come 2021…

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