Blame It On a Short Squeeze
by Jim Woods 05/14/09
Free Trading Guides
As you might suspect, this cascade effect can give the most heavily shorted stocks some very strong upward momentum.
Sectors such as small caps, technology and particularly financials were some of the fastest-moving sectors over the past nine weeks. Not coincidentally, they were also some of the most heavily shorted sectors in March, according to data from research firm TrimTabs.
If you hold a lot of short positions, it can be extremely frustrating to get caught up in the buying flood that is a short squeeze.
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