Friday’s spike from MicroCloud Hologram Inc. (NASDAQ: HOLO) should be enough evidence to get you in the game.
Unless you’re just here for the drama. In which case, welcome. There’s A LOT going on.
I was trading HOLO on February 7 during premarket around the $3 level.
Never in a million years could I have held my shares to Friday’s $98 spike.
But I did say it was possible …
These are short squeezes. HOLO isn’t spiking with bullish news. I documented it in this blog post. The company announced it was joining the Communications Industry Association.
That means nothing!
Short sellers were trying to build positions at the $5 level. I took screenshots from Twitter!
A short position from $5 to $98?!?!
Hopefully they cut their losses before that. But you never know, there could be short sellers still trying to guess the top. And in that case, the squeeze could push even higher.
My message to short sellers: Switch your strategy.
I know the stocks are garbage. I know they don’t deserve to spike 6,400%. The short selling thesis is correct. But there are too many short sellers in the industry right now. Especially in these crappy little stocks.
The price will crash eventually. But we don’t know when.
Join me and my students on the long side.
Trust me, I used to be a short seller. Now I’m long-biased because the short strategy is overcrowded.
And sadly, this message will likely fall on deaf ears.
Short sellers are too stubborn.
For all of my students looking to go long on the next inevitable short squeeze, here’s what I look for:
A Low Float
It’s often more difficult for new traders to spot a short squeeze.
Because usually there isn’t any bullish news accompanying it.
The lack of bullish news is what tempts the short sellers to stubbornly pile in.
Now, there is one factor that we can use to pinpoint possible short squeezes before they go vertical.
A low supply of shares helps to squeeze out overaggressive and overabundant short sellers.
We’re looking for …
- Low-priced crappy stocks
- Spiking an insane amount in premarket (usually we aim for +20% but short squeezes are more obvious … )
- With a float below 10 million shares.
StocksToTrade shows that HOLO has a float of 950,000 shares. That’s way below the 10 million share threshold.
When the market opens during premarket on Tuesday: we start to look for the next short squeeze.
Join us on the live stream.
There’s a very specific price level you NEED to keep in mind when trading these massive runners.
Don’t get stuck on the wrong side …
Cheers.
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