Short Squeeze - What it is: The possibility of a short squeeze is one reason analysts look at a high amount of short interest as a bullish indicator. Short squeezes occur more often in small-cap stocks with small floats, but they can occur with any stock. Investors should pay attention to the short interest ratio of a particular stock and the number of shares sold short relative to the float Those with high short-interest ratios are often more susceptible to a squeeze. A short squeeze occurs when the stock's price doesn't decline as anticipated. A short squeeze is a situation in which a stock's price increase triggers a rush of buying activity among short sellers. Short sellers must buy stock to close out their short positions and cut their losses, which results in a further increase in stock prices, which compel still more short sellers to cover their positions. http://shortsqueeze.com/ http://www.investinganswers.com/financial-dictionary/real-estate/short-squeeze-2045