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URGENT BUY: Your Shot at GameStop-Level Gains

Did you miss out on GameStop’s massive gain last week?

Forget about it.

I’m going to share a secret that Wall Street doesn’t want you to know.

What happened to GameStop’s stock happens all the time.

That’s right…

The rally was the result of a plain, old “short squeeze.”

That’s when traders that bet against a stock have to buy back their shares at a loss.

Now, GameStop’s short squeeze was spearheaded by an online trading forum called WallStreetBets.

That doesn’t necessarily happen every day.

But short squeezes are common in the stock market — without any help from WallStreetBets traders.

And they’re one of my favorite types of trades.

In fact, I more than tripled my money on a squeeze of Canopy Growth (CGC) and doubled my money on a Tilray (TLRY) trade.

So today, I’m going to show you how short squeezes work.

And I’m going to reveal three tech squeeze stocks that aren’t on anyone’s radar…

The Simple Story of the Short Squeeze

Before I get into the charts…

Let’s talk about “short selling.”

In order to bet against a stock, traders borrow shares from a shareholder and sell them into the market.

Short sellers, as these traders are called, make money if the stock goes down — and lose money if the stock goes up.

That’s basically the opposite of long investing, where you buy a stock and hopefully sell it later at a higher price.

Easy enough, right?

Well, here’s the fatal flaw of the practice…

There’s no limit to how much money you can lose if a short trade goes the wrong way.

And when too many short sellers crowd into a stock, it can be difficult for them to get out of their trades.

It gets better…

The more crowded a short trade, the faster and higher a stock can soar before the shorts are squeezed out.

(Imagine a building with too many people inside suddenly catches fire and everyone has to rush for the exit.)

That’s exactly what happened to GameStop.

And squeezes happen on heavily shorted stocks all the time.

Feel bad about the short sellers who get crushed?

You shouldn’t!

Remember that many of them are big, ol’ Wall Street firms with way more money and research firepower than you’ll ever have.

And if they get squeezed, it’s their own fault for taking on too much risk in the first place.

So how can you take advantage of a short squeeze?

I’ve found three tasty tech stocks ripe for spectacular squeezes…

Tech Short Squeeze #1: Medallia Inc. (MDLA)

Medallia Inc. (MDLA) provides AI-powered analytics software and services.

In short, its software can create robust profiles of its clients’ customers, predict customers’ needs and take action accordingly to elevate customer experience.

Pretty handy tool, right?

Despite a challenging 2020, Medallia topped Wall Street’s sales estimates in all four quarters.

And analysts are predicting another strong year for the company in 2021.

The solid outlook helped push the stock to a new all-time high last week.

MDLA

But because the company has consistently struggled to turn a profit, the short sellers have piled on looking for a kill.

As of mid-January, 19 million shares are currently sold short.

That’s a whopping 21% of Medallia’s floating, or tradeable, stock.

And at the stock’s average trading volume, it would take 12 days for the shorts to cover their shares.

In other words, look out for a massive short squeeze here!

Tech Short Squeeze #2: Q2 Holdings Inc. (QTWO)

Q2 Holdings Inc. (QTWO) offers digital banking services to regional and community banks.

Some of these services include mobile check deposit, person-to-person payments and risk-monitoring.

Like Medallia, the company boasts strong sales growth but has yet to turn a profit.

So the shorts are closing in…

Short interest has risen to 6 million shares, up a half million shares in the last month.

Don’t cue the funeral dirge for Q2 yet!

The stock has doubled in less than a year.

And despite a pullback last week, the stock sits just below a 52-week high.

So momentum in the stock favors the bulls, and it wouldn’t take much good news to send the stock SOARING.

If (and when) that happens, it would take short sellers 14 days at Q2’s average volume to cover their positions.

That makes this stock a stellar squeeze candidate!

Tech Short Squeeze #3: 8×8 Inc. (EGHT)

8×8 Inc. (EGHT) specializes in digital voice and video chat communications to businesses.

As you can imagine, competition in this space is fierce with a global pandemic keeping workers at home.

But business has boomed. And the company has consistently outperformed high expectations.

Revenue has more than doubled in the last five years.

And the company’s crushed earnings estimates by double-digit margins in four straight quarters.

Short sellers, on the other hand, have bet heavily against the stock.

20 million 8×8 shares are sold short.

And with an average volume of 1.6 million shares, it would take 12 days for the shorts to close their trades.

Here’s why that’s problematic for the bears…

As you know, I’m ALL about stock breakouts.

And boy, has 8×8 broken out!

The stock surged through resistance at $25 and powered through its 2000 peak at $35 to mark a new all-time high.

This is a monumental move in the stock that points to more upside, not downside.

So when the short sellers get squeezed, 8×8 is going to the moon.

Whether you support WallStreetBets or not, they caught Wall Street short sellers completely off-guard.

And GameStop will go down as one of the greatest squeezes of all time.

But even if you missed those giant gains, regular investors like you can make real money on short squeezes… starting with these three potential moonshots.

Sincerely,

Jonathan Rodriguez

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