Heavily Shorted Stocks Squeeze Higher on Tepper Blessing

Last Friday saw major short squeeze rallies in Tesla Motors, Inc. (Nasdaq: TSLA) and Molycorp, Inc. (NYSE: MCP), among others. The pattern continued Monday, with Tesla continuing its march higher. On Tuesday, a slew of stocks with short interest of greater than 20% short interest suffered the same fate.

Affected stocks include: ITT Educational Services Inc. (NYSE: ESI), Apollo Group Inc. (Nasdaq: APOL), SodaStream (NASDAQ: SODA), RadioShack Corp. (NYSE: RSH), Liquidity Services, Inc. (Nasdaq: LQDT), Questcor Pharmaceuticals (Nasdaq: QCOR), among others.

While it is not known exactly how these squeezes are being orchestrated, given the impressive Fed-fuel rally in stocks, bulls are clearly in control and are pressing their bets.

Hedge fund titan David Tepper had a stark warning for shorts today, giving bulls the extra confidence they need to put the hurt on shorts. "... guys that are short, they better have a shovel to get themselves out of the grave," Tepper said.

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