TTM Squeeze Indicator: Spot a Squeeze to Gain an Edge

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In 2008, Porsche, a German automobile manufacturer, quietly acquired a significant stake in Volkswagen. As Porsche’s stake in Volkswagen continued to increase, it caught many investors and hedge funds off guard. These investors, who had taken substantial short positions in Volkswagen stock, were suddenly faced with a squeeze they did not anticipate. Furthermore, the GameStop short squeeze triggered a broader conversation about the fairness and transparency of the financial markets. It raised questions about the role of social media platforms, the impact of online communities, and the potential for market manipulation.

Daily Trading Volume and Share Price

Because many short sellers frequently need to buy back stocks at the same time, a short squeeze drives up the price of the stock even more. The price movement rises rapidly, which attracts even more buyers to the stock who are not short sellers. Therefore, if too many investors overvalue a company, then they drive up the stock prices in a short squeeze. Short fxchoice review squeeze stocks can present exciting opportunities for traders, but they also come with risks and uncertainties.

Initial Short Positions

If the stock price starts to rise instead of fall, short sellers face potential losses as they must eventually buy back the borrowed shares at a higher price. One of the defining characteristics of short squeeze stocks is the sharp and sudden increase in share price. When a short squeeze occurs, the buying pressure can create a frenzied atmosphere, with investors scrambling to buy shares at any price. This buying frenzy drives the https://www.forex-world.net/ share price higher, often surpassing what fundamental analysis would deem reasonable in the short term. As short sellers cover their positions, the resulting buying pressure drives the stock price higher, potentially leading to significant gains for long investors.

Trading Community

Bond ratings, if provided, are third party opinions on the overall bond’s credit worthiness at the time the rating is assigned.
Furthermore, the GameStop short squeeze triggered a broader conversation about the fairness and transparency of the financial markets.
A short squeeze situation arises when short sellers have to buy back their shares, given the constantly rising market prices.
Bollinger Bands help see how calm or wild the market is, Keltner’s Channels point out when prices are breaking out of their usual range, and the Momentum Oscillator tells us how fast prices are moving.
The value of T-bills fluctuate and investors may receive more or less than their original investments if sold prior to maturity.

One reason a stock price rises far beyond what’s anticipated is a short squeeze. Bollinger Bands are a technical analysis tool that consists of a simple moving average and two standard deviations plotted above and below the moving average. The purpose of Bollinger Bands is to show the volatility and standard deviation move of a stock. The bands expand as volatility increases and contract as volatility decreases. Traders use Bollinger Bands to identify overbought or oversold conditions, as well as to spot potential trend reversals. The color of the dots and histogram bars on the TTM Squeeze indicator also indicates the momentum direction.

Enhancing trading efficiency

The stock reached a pre-market value of more than $500 per share, which had multiplied over 30 times since its starting stock price of $17.25. Anticipating a short squeeze can be challenging, as it requires assessing various factors and market dynamics. Monitoring short interest, analyzing trading volume, studying market sentiment, and identifying potential catalysts are some of the approaches traders use to anticipate a short squeeze. However, it’s important to note that short squeezes are unpredictable and can catch even seasoned traders off guard.

GameStop Short Squeeze (

Alpha is an AI research tool powered by GPT-4, a generative large language model.
It is not intended as a recommendation and does not represent a solicitation or an offer to buy or sell any particular security.
When that day comes, the investor needs to buy shares in the market to be able to return them to the lender.
However, on October 26, 2008, Porsche increased its stake by announcing a 74.1% ownership in shares of the Volkswagen company.
The TTM Squeeze indicator helps traders determine the optimal times to enter or exit trades.
Overall, the TTM Squeeze is one of the great trading tools that helps traders visualize periods of low volatility and prepare for breakout periods and more ideal trading conditions.

A high volume of investors who are shorting a stock and racing to exit their positions at the same time creates a short squeeze. The sudden surge in demand to buy shares of a stock can send the stock’s price even higher. Short squeezes have highlighted the increased influence of retail investors in the stock market. The ability for individual traders to communicate and coordinate through social media platforms, such as Reddit or Twitter, has allowed them to collectively challenge institutional investors and impact stock prices. This newfound power has provided retail investors with a platform to express their opinions, share investment ideas, and potentially participate in short squeezes alongside institutional investors. Traders who initially planned to short a stock may shift their focus to buying and holding shares to take advantage of the upward momentum.

When a short squeeze occurs, the stock price can experience a sharp and sudden increase, potentially leading to significant profits for those who are positioned correctly. But then entered a group of retail traders who teamed up on a Reddit channel called WallStreetBets. They decided to try to force a short squeeze and started buying shares to increase GME’s value. As the stock price increases, short sellers may begin to feel the pressure of mounting losses, as they are required to buy back the shares at higher prices than they initially sold them for.

How does a short squeeze impact short sellers?

Explore key strategies and tips that could give you an advantage in the market. Our weekly digital publication of actionable swing setups, with a horizon spanning from days to months, driven by “FunTech”, our proprietary mix of Fundamentals and Technical Analysis. In the example below the TTM consolidation period starts when the yellow Bollinger bands move inside the white Keltner channels. Lastly, one could conclude that the mass hysteria and hype were fading away, and the people who purchased the top, hoping the price would rise further, were trapped.

To understand how a short squeeze works, it’s essential to grasp the mechanics behind short selling. Short selling involves borrowing shares from a broker and selling them on the market, with the intention of buying them back at a lower price to return them to the broker. In a short squeeze, when the stock price starts to rise, short sellers are forced to buy back the shares at higher prices to cover their positions, contributing to further upward pressure on the stock price. If the shares of NoGood instead increase in price, then the short seller is at risk of losing a very large amount of money on the trade.

The stock, which was worth less than $4 five months earlier, had hit a pre-market value of over $500. Some major brokers then halted the buying of GME stock, claiming they could not provide the necessary collateral, and within days the price began to tumble to $40. A backlash against the brokers followed and over the next few weeks the price jumped back up to $350 before then losing and regaining 50% of its Best etf to day trade value in 24 hours.