That could set the stocks up for a potential short squeeze as some bearish investors throw in the towel and exit their losing short positions by buying back the stock, helping increase the price, according to a Wednesday note from S3 Partners.
"The US market has risen substantially over the last 30 days which has made short positions more crowded and more squeezable as the mark-to-market value of shorted shares increase," S3 Partners said. "Mark-to-market losses on the short side may force some short sellers to trim or exit their positions."
S3 Partners identified stocks that have all the characteristics of a potential short-squeeze, including high borrowing costs, high unrealized losses for investors betting against the stock, and high short interest.
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The notional dollar amount of the short interest measures the collective value of bearish investors' short bets against a certain stock. The amount of short interest could ultimately turn into buying pressure for the stock if a short-squeeze is triggered.
These are the 10 stocks that are most primed for a short squeeze right now, according to S3.
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