If you’re wondering why some stocks which are in a major declining trend suddenly reverse course and zoom higher, the simple answer is that a short squeeze is developing. That’s when short sellers, investors who are betting on falling prices are forced to “cover” their positions.
In order to get out of these negative bets, they have to buy the stocks they’ve borrowed from other investors to sell short.
What happens then is that as the short sellers scamper for the exits, the stock goes up in price. In this video, I show you how to spot the set up for a pending short squeeze before the crowd.
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