EarningsBeats.com Digest for February 10, 2021
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Upcoming Earnings ChartList
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that you certainly don't want to miss!
On The Verge Of A Breakout And Short Squeeze
There's been much said and much written about short squeezes the past few weeks, but it's a very simple supply vs. demand equation that's going to remain with us as long as rules remain that allow shorting. When short sellers are fearful and they want to lessen their pain, they cover (buy). It takes place when other technicians would typically buy - on breakouts. So volume swells on such breakouts and that buying begets more buying as more
short sellers are forced to cover. Buying heavily shorted stocks certainly adds more risk, but there's also great potential if the short selling truly does trigger. One stock on our Short Squeeze ChartList that's approaching such a breakout level is OPK:
We have not seen an open or a close above 6.02. The highest candle body in July was 5.96 and a little more than a week ago was 6.02. OPK closed at 5.70 on Tuesday, so it's still got a bit of work to do. If you enjoy trading heavily shorted stocks, however, you'll want to be prepared and understand the key price levels so that you're making an informed decision to buy at a key level, rather than being caught off guard and buying after a big move
has already been made. OPK is part of the biotech space ($DJUSBT) and would be helped along if we happen to see a relative breakout in the group above the 0.71 level highlighted in the chart.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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