Institutional investors should be aware that post-earnings rallies in heavily shorted stocks such as Charter Communications, POOL, and MTCH have significantly increased their squeeze risks, indicating potential short-term price volatility due to the high possibility of short squeezes.

Earlier, we noted that some names had high squeeze scores and that an upward move could push the squeeze score above 70. While we did not specify which names would go up or down, we did indicate the potential extent of their movements based on market pricing.

Of the original six names, CHTR and POOL are now squeeze candidates’ post-earnings, and MTCH has also emerged as a candidate.

Following earnings, three names have rallied to the extent that their squeeze scores are now high enough to suggest that a squeeze is possible.

There are two factors influencing this: the size of the short position, which is structural and determines the ‘crowded score,’ and the recent return, which, when appropriately factored in, contributes to the squeeze scores.

For all the names, the short position is measured as a percentage of the shares float.

Charter Communications (CHTR) is up 16% following earnings. The short position is 12% of the float, and the squeeze risk is now 90. It is possible that a partial squeeze occurred last week, as the stock increased, and the short position decreased from 12.5 to 11.5 million shares.

WAT, the stock is up 10% on earnings The short position is 5% of float, squeeze risk is 70. There has been no short covering.

CHRW, stock up 10%,up on earnings shorted 6% of float squeezer risk of 67.5. The short position is increasing.

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