Up to this week’s midway point, 2021 has been the year of the meme stock short squeeze. First, we had GameStop mania back in January, and then again in March.
And this week has been all about the AMC short squeeze…
What is a short squeeze? In plain English, when you have a bunch of people who are short a stock, which means they’re betting on it to go down… and instead it goes up, the shorts get squeezed like a lemon or an orange.
And what happens if instead the stock goes up, the shorts exit their positions because they’re losing money and getting squeezed out of their positions.
In order to get out of a short position, you have to buy back the shares you borrowed. So they’re buying, and then you have momentum traders who come in and buy, sending the price even higher and squeezing out more shorts.
Then it just becomes a self-fulfilling prophecy, sending a stock straight up.
So that’s step No. 1… And step No. 2 that I’m sure you all want to know is… how do I make money?!
The first thing you have to do is identify stocks with high short interest. We have a strategy called Infinity Profit Plays that gives you my short squeeze stocks and option trade alerts, and a list of stocks with high short interest. The list also has some commentary from myself on each company that you can use to make your own picks (in addition to the plays I give you).
And this past week’s trade alert for the service was on AMC Entertainment Holdings Inc. (NYSE: AMC), just ahead of the AMC short squeeze.
Unless you’ve been living under a rock the past week or so, then you know what’s happening with AMC right now. And if you missed it, that’s fine. My feeling is you never, ever want to chase these things…
Just like there’s always another bus or train coming, there’s always another stock or another short squeeze coming. You have to ask yourself if you’re early, or if you’re late. Look at the chart above and tell me if you think you’re early or late to the AMC short squeeze.
So the trillion-dollar question is… what’s the next play? Because that’s what you should be looking for instead of buying things like AMC when you’ve already missed out.
Check out my short video and let’s talk more about the AMC short squeeze.
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