How To Trade Short Squeezes Like AKAN

Last week someone came in hot on my Sunday Market Brief livestream saying Akanda Corp., (NASDAQ: AKAN) wasn’t a short squeeze. I went easy on her but it got me thinking.

New traders might not know how to create a trade plan for short squeezes. So, I’ll use AKAN as an example and give you two clear setups.

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The Big Picture

AKAN started its run after the executive order promoting psychedelics as therapy for PTSD. AKAN and other weed stocks got a bump from the news.

As I write, AKAN is up 700%+ from the $10.25 alert shown below.

Now, if someone says it’s not a short squeeze all I can say is peep the 10-day chart:

AKAN has not looked back ever since the alert. Remember, it was a $3 stock before the news. Shorts jumped in when it hit the $10s. Then they went big in premarket trading on April 23.

They must still believe in “good to zero” because they didn’t start covering until it grinded sideways into the afternoon on April 24.

Afternoon Entry

The best time to trade these squeezes is an afternoon entry because that’s when shorts are extra timid. That’s why AKAN went from $10 to $15 on April 24

Now, I’m not saying anyone who traded based on the alert should still have a position from the $10s. But there’s an approach I sometimes take that can potentially pay-off with a squeezer like AKAN.

Lottery Size

You can always keep a few shares for what we call “lottery” size. You lock in your gains but keep a puny position. Then you move your stops up along the way.

How could you trade AKAN if you missed it or got stopped out?

2 Short Squeeze Trade Plans

There are two different ways to approach a short squeeze that’s gone as far as AKAN.

First, find the gap the stock has to fill. With AKAN that was up into the $80s.

That tells you where there’s major resistance. Then, depending on the price action, there are a couple of ways to play it.

1. If it gaps down but holds at support, you can roll the whole dollar, half dollar levels as an entry. Remember, we’re talking about a stock in the $60s. So $60.50, $61.00, $61.50 and so on. Sometimes people get way too much anxiety about a few pennies. If you worry about a few pennies, you miss the entry.
2. If it doesn’t sell-off overnight and just keeps going, then you follow key numbers like $65, $70, $75, $80 – all the way up.

Again, I don’t suggest going all-in on a stock like AKAN. Eventually shorts get tired and the squeeze runs out of steam. Always be aware of how far a stock has run.

If the AKAN squeeze is played out by the time you read this, remember it for next time. These squeezes just keep happening.

My Take

I’m so proud of the Panic Point Terminal. It is unlike any other trading tool that I’ve created. Using a proprietary formula, it finds stocks positioned for a potential squeeze and identifies the likely short seller “panic point” for entry.

Watchlist

You didn’t think I’d write about AKAN and not put it on the watchlist, did you? Especially not when AKAN squeezed again right out of the gate on Friday, leading to another volatility halt.

It hit $75 out of the halt. X might be a little quieter the next few days while shorts lick their wounds.

On My Radar

• You didn’t think a sci-fi loving child of the 80s would forget, right? May the 4th Be With You.
• Another classic that every day trader should read: “The Crowd: A Study of the Popular Mind” by Gustave Le Bon. It applies directly to short seller chat rooms.
• The Pentagon is all-in on AI after signing agreements with seven tech companies.