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The basic idea behind a short squeeze is to look for a stock that a lot of traders have been shorting in the recent past (this is a very bearish thing to do) and then are reversing direction and covering those trades by buying the stock. All this buying creates a positive feedback cycle by creating demand, which will increase the stock’s price. If you can correctly identify stocks with a risk of a short squeeze they may be good short term long candidates.
[VIDEO] Short Squeezes