A short squeeze happens when a heavily shorted stock rises rapidly, forcing short sellers to buy back shares, which drives the price even higher. One of the most famous examples is GameStop (GME) in 2021, where retail traders triggered an ridiculous rally. In this guide, I’ll show you how to find potential short squeeze candidates using a simple stock screener.
Step 1: Go to Finviz Screener
Visit Finviz and click on the “Screener” tab.
Step 2: Apply These Filters
| CATEGORY | SETTING | REASON |
| Market Cap | Over $100M | Avoid tiny stocks (manipulation risks) |
| Short Float | Over 20% | High short interest = more squeeze potential |
| Current Volume | Over 500K | Ensures liquidity for trading |
| Relative Volume | Over 1.5 | Shows unusual trading activity |
| Price | Above $5 | Avoid penny stocks |
| Float | Under 50M | Less shares available = more potential for drastic movement |
Step 3: Analyze the Results
- Check recent news and catalysts (earnings, upgrades, hype).
- A short squeeze needs a trigger—something that forces shorts to panic.
- Look for:
- Earnings beats (good financial results)
- Analyst upgrades (big firms raising price targets)
- Social media hype (Reddit, Twitter buzz)
- Sector momentum (similar stocks running)
- Chart Patterns
- Resistance Level – Look for a place where the stock struggled to go higher multiple times. It often forms a flat ceiling on the chart.
- Consolidation – Look where price moves in a tightening range, forming a triangle or sideways channel. This shows the stock is building pressure for a breakout.
Conclusion
Long story short: look for high short interest, unusual volume, and breakout setups to spot potential squeezes early. Remember, short squeezes aren’t guaranteed. Stocks can stay heavily shorted for a long period of time, but when the right conditions align, the moves can be massive. Only trade use this strategy with money you’re willing to lose.