As stock indexes soar to new highs, Trade Ideas technology is focusing on stocks making new 52 week highs. However the search has been narrowed to those stocks that have a high level of stubborn short sellers who still have not bought the stock back to close their losing short positions. If a stock is making new 52 week highs, you can be sure that very few short sellers are in a profitable position. So why not exploit their stubbornness and look for a “short squeeze” play?
The Trade of the week in GBX will be considered live at 52.76. After recent consolidation a trade above this level should trigger more short covering in GBX at new 52 week highs. There are only 27 million shares in the float and the percentage of those shares that are short is between 33-41% (as of the last reporting period).
The suggested stop in GBX will be 49.25. The suggested target will be 60.00. So risking 3.51 to make 7.24 is the plan. You could always consider selling half at the profit target and letting the other half work for you. This helps take some of the emotion out of trading and allows for more patience on trades that are working in your favor.