Today is one of my favorite days to trade.
If you don’t know why you’re about to learn something that could change your trading…
And by the time you finish reading this, Friday might just be your favorite trading day too.
Because some of the biggest spikes can happen on a Friday…
I’m talking about stocks that soar as much as 63% in a single day!
This is the number one setup I look for today because it has a funny way of repeating — I’ll explain why below…
Plus, I’ll show you two perfect examples we just had last Friday…
And give you the two criteria I look for to spot Friday squeezes.
The next one could happen as soon as today! So get ready to trade them for yourself…
Why Fridays Are my Favorite Trading Day
Friday afternoons can offer some incredible opportunities to catch massive upside moves.
I’ll show you some examples of 30% and 63% moves shortly…
But first, let’s dig into why these moves happen.
These big gainers are often created by short squeezes. On Fridays, short sellers try to exit their positions before the weekend. Because they want to avoid fees for holding short positions over the weekend.
There are also more risks that news could come out and squeeze them on Monday morning in a big gap up.
Once short sellers start to buy to cover to exit their positions, it creates demand. That increases the price and can trigger other short sellers’ stops.
Then you can see a sort of buying frenzy that creates massive upward momentum … And long traders can join the trend and take advantage of it.
You can see big percent gains like the 63% run in BigBear.ai Holdings, Inc. (NYSE: BBAI) last Friday…
BBAI chart: 1-day, 2-minute candle — courtesy of StocksToTrade.com
But you can just look at any random stock for this kind of move. There are certain criteria I focus on to find stocks with the most potential for this kind of move…
Criteria For A Potential Friday Squeezer
I look for Friday squeezes in certain stocks that check the boxes on a Friday afternoon.
There are two criteria I like to see:
- Hot sector — I want the potential big runner to be in a hot sector. This can be a stock running with a group of stocks on the same macro news headlines. Or stocks within the same sector. The ‘investigations into illegal short selling’ was a recent hot theme where stocks ran on the same headline. The recent gaming stock and artificial intelligence runs are examples of hot sectors.
- Multi-day holds — A potential Friday squeezer is often a stock that’s been “hanging around.” For example, let’s say a stock has a big run from a dollar or two per share up to $8 or $10. Then a few days or a week later, it’s still trading near its highs or well above where the initial run started. That’s a multi-day runner that’s holding its gains.
Stocks with these two criteria can be good candidates for Friday squeezes because they’re often loaded with short sellers.
Shorts could be adding to the positions into pops and risking the recent highs or another key level.
And when that level breaks to the upside, most of them are underwater and have to buy to cut losses. Then we can get a beautiful epic squeeze.
These Friday moves don’t happen every week, but catching just a piece of these big moves can potentially make your week or month as a trader.
Look at these spikers from last Friday…
Friday Squeeze Examples
C3.ai, Inc. (NYSE: AI) was in an uptrend since it had a multi-month breakout above $15.50 on January 27.
It’s a real company in a hot sector and short sellers just kept trying to guess the top for a week. The stock kept holding up and last Friday it had a red-to-green move and smoked shorts when it shot up roughly $7 per share!
AI chart: 10-day, 2-minute candle — courtesy of StocksToTrade.com
BBAI is the example I shared earlier. It’s also in the hot artificial intelligence sector.
You can see it had two big spikes and formed a double top at around $4.25. Then it held up and consolidated for two days. When Friday rolled around, BBAI went from red to green causing a spike.
Then it broke the $4.25 resistance level and made a high of $5.90.
BBAI chart: 5-day, 2-minute candle — courtesy of StocksToTrade.com
These are the kinds of setups I look for in the market every Friday. Try to spot and trade these powerful moves for yourself.
If you need help, see what stocks I’m watching each week plus get my market insight videos three days a week when you join StocksToTrade Advisory.
Your membership also gives you access to my top 10 trading patterns ebook. So you can start trading these stocks with your own pattern and plan.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade