Hey traders, it’s Matt here.
There’s a specific trade that I’m looking for this week …
Ever since Bright Minds Biosciences Inc. (NASDAQ: DRUG) spiked 2,300%* on Tuesday, October 15, we’ve seen a lot more of these plays.
And to think … DRUG spiked even higher on Friday …Â
The total move now measures an astounding 3,000%*, in less than a week! Take a look at the chart below.
Every candle represents one trading minute:
DRUG chart multi-day, 1-minute candles Source: StocksToTrade
It was absolute insanity!
And DRUG wasn’t the only crazy spiker. There were a bunch of sympathy plays. To name a few:
- Tevogen Bio Holdings Inc. (NASDAQ: TVGN)
- Catheter Precision Inc. (AMEX: VTAK)
- Versus Systems Inc. (NASDAQ: VS)
- VS Media Holdings Limited (NASDAQ: VSME)
I’m looking for the next insane spikers this week.
And I can use last week’s runners to help find them …Â
The Next HUGE Runner
As incredible as the DRUG price action was … it’s not surprising.
We’ve already seen runners like this in 2024.
Wheeler Real Estate Investment Trust Inc. (NASDAQ: WHLR) spiked 1,100%* in September.
This is not a new phenomenon. They’re short squeezes.
The short seller strategy is oversaturated right now. And it results in massive stock spikes like DRUG, WHLR, and the other tickers that I mentioned.
Here’s how it works:
A ton of short sellers pile into a small-cap stock spike. They try to ride the fleeting momentum lower, but a little bullish price action can cause some to panic and buy to get out. And due to the immense number of short sellers in the stock, it can cause a domino effect of short sellers blowing up.
Theoretically, there’s no telling how high these plays can go. Shorts could keep guessing the top and keep blowing up.
The proof for this ‘theory’ is all over social media like X.
We can see short sellers hype their position.
And when they lose they’ll occasionally post their loss porn … before deleting it. Let me tell you … some of it is graphic. I’m talking about hundreds of thousands of dollars in losses.
My mentor, Tim Sykes, posted a video recently where he cataloged proof of short sellers posts on X.
You can see all of the evidence below. Skip to 7:35 in the video:
This has been happening for years.
Remember that the infamous GameStop Corporation (NYSE: GME) spike in 2021 was a short squeeze.
And judging by the stubborn attitude of these short sellers … it doesn’t look like the spikes will stop any time soon.
DRUG Trade Alert
Last Monday, Sykes’ AI trading bot, XGPT, alerted a $1.95 entry on DRUG before it spiked to $79 … That was a 3,900%* trade opportunity.
I’m definitely watching for XGPT’s next trade alert!
Take a look at the chart below with the trade overlaid. This was on Monday:
DRUG chart intraday, 1-minute candles Source: StocksToTrade
Look out for low float stocks that are spiking +100%.
If it can spike +100%, there’s no telling how high it could go.
The intense price action of a short squeeze is almost unmistakeable. But if you need proof, type the ticker into Twitter and search for some degenerate short sellers.
Get ready for Monday’s price action!
Cheers,
Matt Monaco
*Past performance does not indicate future results