04/03/2017 2:50 am EST
One of our favorite screens looks for short-squeeze candidates. Short sellers sell borrowed shares in hopes of buying the shares back at a lower price and pocketing the difference.
If a heavily shorted stock begins to rally, short sellers may decide to cover their positions by buying back the borrowed shares. In some cases, new buying begets even more buying — and pushes the stock price higher.
Below are six stocks with short ratios above 10, which approximates the number of days needed to purchase all shorted shares based on average trading volume. All six earn Quadrix Overall scores of 94 or higher.
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