
Dividend Collector
Total Assets$Strategy(MSTR.US) It's been half an hour of tug-of-war, I'm really fed up!
So-called "short squeeze" refers to the tactic where long positions continuously drive up the stock price, keeping it at high levels to prevent short sellers from establishing positions at lower prices, forcing them to buy at higher levels and reducing their price differential income. "Short squeeze" originated in futures markets.
In stock markets, it means continuously pushing up the price so short sellers can't enter at prices lower than their selling points, having to chase the rally at higher levels. A short squeeze is when bulls keep driving prices up until shorts can't bear it anymore and surrender by covering their positions.
Actually, a short squeeze can be simply understood as repeated one-sided rallies that don't give investors who sold waiting for pullbacks a chance to buy back. The characteristic of this market behavior is that once you sell, it's hard to buy back because investors hope to buy at pullback lows, but these pullbacks always stop just at the threshold.
This trend easily creates bagholders at high levels because most investors have the habit of chasing rallies. One-sided uptrends are extremely attractive to investors - while highly risky, the potential rewards can be substantial, severely testing investors' mental fortitude.
Identifying this trend requires multidimensional thinking: valuation, P/E ratio, P/B ratio, news flow, macro environment, policy factors, technical analysis etc., to discern whether it's intentional pump-and-dump or genuine breakout.
They say the workplace is like a battlefield - this applies even more intensely to capital markets with its back-and-forth, deceit and all kinds of tactics - there's always one that suits you.
May it not be a short squeeze!
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