"The Short Squeeze Setup That's Too Good to Ignore" Nate Bear, Lead Technical Tactician, Monument Traders Alliance Hey Gang, Sometimes the best trades come from the most obvious setups. Last week, I spotted QUBT setting up for what looked like a textbook squeeze play. The stock had crushed earnings in May, was riding high on momentum, and here's the kicker – it had a massive 20% short float. When you see that combination of strong fundamentals, technical momentum, and heavy short interest, you've got the recipe for fireworks. Sure enough, we nailed it: +100% gain in just four days! But here's what has me really excited right now... I'm seeing the exact same setup forming in Super Micro Computer (SMCI). And just like QUBT, SMCI is sitting on approximately 20% short interest. That's the same explosive short float percentage that just delivered our perfect winner. When shorts get trapped in a stock with strong technical momentum, the squeeze can be absolutely devastating – in the best possible way for us. However, we need to look at the big picture to help us understand why these beaten-down stocks are poised for a rebound. Current Market June isn't an easy month for most traders. Volume dies up…kids are on summer break…earnings have ended. Plus, with the Juneteenth holiday, we get a mid-month break that sets us up for the July 4th holiday. Naturally, that leads to a lack of price action in large and mega-cap names. However, active traders are always looking to capitalize on themes. Lately, we've seen renewed interest in quantum computing stocks like QUBT. But after a few weeks of riding that wave, I expect we'll start to see a rotation into other ideas. And there's no bigger macro theme than AI technology. In the last week or so, we've seen renewed interest in momentum names like C3.ai (AI), BigBear.ai (BBAI), and even SMCI. What makes SMCI so special? Let me tell you. Super Micro Computer (SMCI) In 2024, SMCI's shares rose from $30 to $120 in a matter of months. The rest of the year saw the stock give back all its gains as revenues failed to meet expectations. Plus, there was a delayed filing and some issues with its auditor. While those risks still exist, they're largely in the past. What's particularly compelling about the current setup is how SMCI has formed a beautiful consolidation pattern after its post-earnings push. Take a look at this chart: The technical picture is absolutely gorgeous: - Strong Post-Earnings Momentum – SMCI surged after delivering solid results, showing the market is ready to forgive past issues
- Perfect Consolidation Pattern – Instead of selling off, the stock is holding its gains and coiling like a spring
- Stacked Moving Averages – Multiple layers of support are building underneath, creating a rock-solid foundation
- Great Squeeze & Momentum Shift Higher – My proprietary indicators are showing compression followed by momentum bursts
What makes this setup even more explosive is that 20% short float. When you combine strong technical momentum with heavy short interest in a stock that's benefiting from the AI infrastructure boom, you've got all the ingredients for a massive squeeze. The shorts who piled in during SMCI's troubles earlier this year are now getting squeezed as the company proves it can still capitalize on the AI server demand. And with that level of short interest, any sustained buying pressure could trigger an explosive move higher. This is exactly the type of setup that can create explosive price movements – those powerful surges that happen within minutes of the market opening. | 
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