EarningsBeats Digest

Published: Mon, 11/30/20

EarningsBeats.com Digest for November 30, 2020

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Could This Be The Next Big Short Squeeze Stock?

I've seen one major short squeeze after another unfold on our Short Squeeze ChartList (SSCL) as money has begun rotating to weaker areas of the market. Nearly 25% of the most heavily shorted stocks now have SCTR scores above 90, reflecting excellent relative strength. If you're looking for short squeezes, that's EXACTLY what you want to see. As absolute and relative strength improves, you begin to see technical buyers emerge. Throw in panicked short sellers that must buy to cover and you can see parabolic moves. The rotation has taken place mostly in November and roughly 20% of our entire Short Squeeze ChartList is up by 50% or more in the past 30 days. If you want BIG gains in a short time period, our SSCL is the place to go. One stock that's on our SSCL that hasn't yet made it to the big time is Dillard's (DDS):

DDS is consolidating in a symmetrical triangle, as is its industry group, broadline retailers ($DJUSRB). A breakout in the industry and in DDS could lead to very sizable gains ahead. Watch the volume on DDS. Should that begin to routinely amount to 500,000 to 1,000,000 shares per day (or more), and DDS breaks above the 53 level, we could see yet another short squeeze develop. I like the fact that DDS hit its highest relative level vs. its broadline retail peers earlier in November. A breakout in the group could lead to a big advance ahead for DDS.

Happy trading!

Tom Bowley

Chief Market Strategist

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