3 Short Squeeze Stocks Set for a January 2024 Rally

Short squeezes, which have a potent impact on short squeeze stocks, happen when large numbers of traders shorting an asset need to close their positions due to a rise in the asset's price. This forces the share prices of the businesses to escalate considerably. To identify stocks that could be potential candidates for a short squeeze rally, it's crucial to examine the short interest data. The short interest ratio indicates the number of shares shorted in relation to the stock's average daily trading volume. A high short interest ratio, like anything over 20% of the float, suggests increased market sentiment and likelihood of a short squeeze. Short sellers, who anticipated the security price to fall, face substantial losses as the price starts to rise. This prompts some to cut their losses and close their positions, amplifying the price rise.

Fisker (FSR), an electric vehicle manufacturer, is a prime example of a potential short squeeze stock. Known for its commitment to stylish and sustainable mobility solutions, Fisker focuses on producing environmentally friendly vehicles without sacrificing performance. Their flagship model, the Fisker Ocean, emphasizes design and sustainability. Despite a rough year, Fisker's short interest ratio stands high at 45%, suggesting it could see higher than expected demand in a better economic climate.

Beyond Meat (BYND) is another company to consider in terms of short squeeze potential. Known for its plant-based food alternatives, Beyond Meat has captured the attention of environmentally conscious investors. Despite a falling stock price and weakened demand for its products, Beyond Meat's short interest ratio stands at 42.2%, indicating it might attract more investment in the upturn.

Plug Power (PLUG), a leader in the hydrogen fuel cell industry, is another potential short squeeze stock. Despite a significant stock value loss in 2023, which led to the company issuing a going concern warning, the firm's short interest is nearly 30%. This figure suggests the stock could attract more demand as the general risk sentiment improves and focus shifts away from macro concerns.