In 2021, GameStop went from a forgotten retailer to a once-in-a-generation trade.

Investors made fortunes overnight.

But the stock didn’t rise because the business suddenly improved.

It rose because too many investors were betting against it… and then all were forced to buy shares at the exact same time.

Right now, that same setup is playing out in Avis Budget Group (CAR).

The stock has surged 600% in the last three weeks.

Nothing about the underlying business has changed.

In fact, the company is still dealing with declining revenue, large losses, and heavy debt.

But none of that matters in a short squeeze.

Only supply and demand matters.

And the best part?

If you know what to look for… you can spot these moves before they happen.

Here’s What’s Actually Happening

To understand this Avis situation, you need to understand short selling.

Most investors buy stocks hoping they go up.

Short sellers do the opposite.

They borrow shares, sell them, and hope to buy them back later at a lower price.

If the stock falls, they profit.

But if the stock rises, their losses grow.

And unlike normal investing, those losses can keep expanding as long as the price climbs.

Eventually, they have to get out.

And the only way out is to buy the stock.

That’s where the “squeeze” begins.

As the price rises, short sellers are forced to buy.

That buying pushes the stock higher → which forces more short sellers to buy → and so on.

It becomes a feedback loop that feeds on itself.

GameStop was the biggest example of this.

Avis is the latest.

Here’s Why Avis Went Vertical

Avis had all the ingredients for a squeeze.

1. A crowded short trade, with a massive percentage of investors betting against the stock.

2. A tight supply of shares, with more than 70% controlled by just two large investors.

3. And a stock that started moving higher.

That’s all it takes.

Once the price began to rise → short sellers got put under pressure → losses built quickly → short sellers were forced to buy in order to close their positions.

At the same time, other traders saw what was happening and piled in.

Not because they believed in the business, but because they recognized the setup.

Now Avis’s stock price has two forces working together:

• Short sellers who have to buy.

• Momentum traders who want to buy.

Couple this with tight supply on the other side and you’ve got a setup for an explosive move higher.

Avis Won’t Be The Last…

It’s easy to look at Avis and think this is a unique situation.

It’s not.

Pull up a list of the most shorted stocks in the market right now and you’ll see dozens of names with 40%, 50%, even 80% of their shares sold short.

Here are some notable stocks on the list.

Hertz Global Holdings (HTZ) immediately stands out.

• Same industry as Avis.

• Heavily shorted.

• Massive shareholder concentration – Knighthead Capital owns roughly 57.6% of the company.

So does Lucid (LCID).

• Heavily shorted.

• New partnerships with Nvidia and Uber.

• Buyout candidate amid autonomous vehicle boom.

Both of these are great short squeeze candidates – with Hertz having the added benefit of a large shareholder.

But just remember, these moves don’t last forever.

Short squeezes are driven by forced buying, not long-term conviction about what the company is worth.

Once that buying runs out, the stock snaps back just as quickly as it went up.

That’s what happened with GameStop.

That’s what happened during Avis’s last short squeeze in 2021.

And that’s how this squeeze will end too.