Coronavirus Short Squeeze Plays: How Fundamentally Flawed Companies Spike

The coronavirus short squeeze plays are HOT right now!

There’s a lot of volatility in the market these days. That can be a good thing for educated and prepared traders. Personally, I love the volatility. It provides killer opportunities for me and my students.

That said, a lot of new traders might be struggling right now or losing money. I’m here to help you learn. I want to teach you my favorite trading patterns and the nuances of the market so you can be a self-sufficient and smart trader.

One trading pattern to definitely watch right now is the coronavirus short squeeze… 

I’ve been talking about short squeezes since the end of last year … Short selling is such an overcrowded niche right now. That can create great opportunities to take advantage of the upside.

But first…

Have You Watched my New “Volatility Survival Guide” Yet?

If you’re feeling overwhelmed right now, please, please, please watch my new NO-COST two-hour guide on how to survive this volatile market.

It’s a confusing time. A lot of people are losing money. So I made this guide to help you trade smarter during this crazy time.

So far, nearly 10K people have signed up for it and watched it. It’s getting amazing reviews. But some people are just lazy. They can’t be helped. They just want hot stock picks and someone to spoon-feed them every trade. That’s not how I teach.

I want to show you which stocks to focus on and the patterns that have worked for me over 20+ years in the market.

Click Here to Get the Volatility Survival Guide

If you already watched it, you know that coronavirus short squeezes can really fly. Prepared traders can take advantage of the long side. Don’t short sell this sector — it’s just too risky.

So what is a coronavirus short squeeze?

Coronavirus Short Squeezes

The coronavirus sector is hot. Stocks are running on any news about masks, hand sanitizers, or possible vaccines. But the reason these stocks continue to run so high is because of the over-aggressive short sellers.

Because the short sellers have to buy to cover their positions when the stock starts to go against them, it creates huge spikes in the stock price due to all the buying. The most fundamentally flawed companies become the biggest gainers in the market.

The short sellers are so stubborn and feel virtuous for shorting these junk companies. They figure the stock price doesn’t deserve to be up so high. They haven’t learned that they shouldn’t short a stock in a hot sector with news on its first green day.

Remember, the market doesn’t care what you think. It doesn’t care what your opinion of the news or a company is. The market’s always right. That’s why it’s so important to react. Don’t try to predict.

And watch out for …

Short Selling Chat Rooms

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There are some newbie short-selling chat rooms out there that are shorting stocks with big positions. They show screenshots of big-dollar gains but never share entries and exits. They’re not fully transparent. They just short everything that’s up because they figure these are all garbage companies.

If you want to short sell stocks, that’s fine. But know the risks.

The problem is, these newbie short-sellers don’t explain the risks. They go around telling everyone how right they are for shorting this horrible company. And they try to lure in other newbies who don’t know all the risks.

So what are the risks? The biggest risk is losing your entire account … or more. That’s right, it’s possible to lose more money than you have in your account. You can end up owing your broker money.

And if you’re down too much on your position, your broker can just buy you in. You don’t get to wait it out … even if you’re eventually right. They’ll buy you in — and you’re stuck with the loss.

There are also fees for shorting stocks. None of these newbies ever talk about that … Brokers charge locate fees to find you the shares, and they also charge you interest for borrowing them.

Finding shares to borrow can be a pain, too. Not all brokers will have them and some won’t even get them for you … it’s just a bad strategy.

Now let’s get to some recent short squeezes and a few of my trades…

Youngevity International, Inc. (NASDAQ: YGYI)

The news for this stock wasn’t the best. They got the rights to produce a hand sanitizer. Who knew hand sanitizer was gonna be a hot sector at the start of the year?

YGYI was my first trade of the day on April 7. I got in on a dip at $1.55. I only got 2,000 shares, but I wanted a bigger position. But I’m not mad about it. I sold at $1.70 and made just under $300.**

It was a pretty choppy stock. After I was out of my position, there was a big dip after the morning spike. That got all the short sellers excited. They thought they could pound it into the ground all day. But then the stock started churning back up…

YGYI 1 day stock chart
YGYI chart: 1-day, 1-minute candle — courtesy of

These shorts open the door to big short squeezes. YGYI squeezed from roughly $1.50 to $2.50.

[**My results are NOT typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.]

Akers Biosciences, Inc.(NASDAQ: AKER)

The Akers coronavirus short squeeze was similar to YGYI…

There was a big morning spike, then the shorts thought they could drive it back down … But just like YGYI, the stock slowly churned back up and broke past the morning high in the afternoon.

It squeezed from $4 to $6 before fading back off. Let’s look at the chart:

AKER stock chart
AKER chart: 2-day, 1-minute candle — courtesy of

The next morning it continued to squeeze all the shorts who were in from the previous afternoon. Eventually, the shorts were right. The company did an offering, which resulted in it fading off the rest of the day.

The short sellers just don’t learn that these stocks don’t run on fundamentals. It doesn’t matter how crappy the company is — news and hype can move penny stocks BIG.

I personally didn’t trade AKER. I don’t always like to trade short squeezes. But a lot of my students report trading it well. It’s all about finding the strategies that work for you.

Decision Diagnostics Corp. (OTCPK: DECN)

My next trade was DECN. First of all, I have to say that I’m trading in LA and getting up early. I’m NOT a morning person — and I’m not enjoying this time zone. I usually have a nap mid-day and slam caffeine like crazy…

With Decision Diagnostics, a student alerted the chat room to news about the stock. The company got a Pre-EUA (Emergency Use Authorization) Acknowledgement letter from the FDA for its coronavirus test kit. I checked out the chart, and DECN was dropping at the time. I posted in the chat room that the stock was dropping despite the good news.

I figured the stock was failing and there was no play. I thought maybe the news was already priced in … I didn’t see any truly great plays. So I took a nap.

As you can see from the chart I missed a great play in the morning…

DECN stock chart
DECN chart: 2-day, 1-minute candle — courtesy of

In the afternoon, I was interested in the dip. I prefer dip-buying panics in the morning, so this was a bit of a speculative trade. But I’m more comfortable buying dips than chasing strength, so I dip-bought 35,000 shares at $0.2201 and sold at $0.242 for $766 profit.**

I was also happy to see that while I napped, my students traded DECN without me and didn’t miss the opportunity…

[**Again, my results are NOT typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.]

Learn With Me in the Trading Challenge

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All my top students are in my Trading Challenge. Only Trading Challenge students get access to live and archived webinars. There are three to four a week with me and my top students, like Tim Lento, Mark Croock, Tim Grittani, and Michael Goode.

As part of the Challenge, you also get access to over 5,000 video lessons and all my DVDs. Apply today. But know that I don’t accept everyone who applies. Only the most dedicated students with the right mindset are accepted.

The Trading Challenge chat room is a trading community. We help each other, share trade ideas, and alert stocks that are moving. It’s a great place to connect with other traders and a learning tool for both new and experienced traders.

The Coronavirus Short Squeeze Conclusion

These coronavirus short squeeze plays are no joke — this market has wild volatility.

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Don’t underestimate a stock running on coronavirus news or in any hot sector. You never know how high these stocks can run. Especially when the shorts are all getting squeezed and they’re all trying to buy to cover…

That can make for big and fast spikes. So be careful.

If you haven’t watched it already, click here to get my no-cost Volatility Survival Guide. I made it to help you learn to navigate this and any volatile market.

Focus on the best patterns: morning spikes, short squeezes, and breakouts. You need to know the patterns and understand catalysts.

Recognize that some moves can be delayed … The biggest spike on YGYI came after 11 a.m. And it took DECN 20 minutes to react to the news.

This is why I love penny stocks. You can learn to take advantage of the informational inefficiencies in this niche. And you’re not competing against the big Wall Street traders. This niche is full of lazy, unprepared degenerates. You can be late and still catch a piece of the move.

Do you understand coronavirus short squeezes? Let me know in the comments … I love to hear from you!