3 Short-Squeeze Stocks Ready to Soar on Roaring Kitty Rally

Yesterday, the forgotten meme stocks of 2021 started picking up serious momentum. But unlike 2021, it didn’t take much to see the reason behind GameStop’s (NYSE:GME) sudden surge. Keith Gill, the Massachusetts financial advisor credited with launching the GME short squeeze of 2021, unexpectedly returned to social media, posting a single, cryptic image on his X account, where he goes by the alias Roaring Kitty.

The image showed a hand-drawn man playing video games with no caption or further context. But the cult of r/WallStreetBets took it as a sign that their leader had returned and began hyping up their favorite short-squeeze stocks. This sparked a massive rally for GME and fellow unstable meme stock AMC Entertainment (NYSE:AMC).

Even so, the Roaring Kitty rally appears to already be slowly losing steam. This should be expected when meme stocks unexpectedly surge. However, plenty of other companies with high short interest are also enjoying the ride, some of whom continue to rise steadily. SunPower Corporation (NASDAQ:SPWR) is up 84% today and remains on an upward trajectory. This means that the short-squeeze stocks to watch for maximum gains are likely lesser-known companies. A quick look at the short squeeze leaderboard from Fintel reveals several key stocks to watch.

Short-Squeeze Stocks: Arca Biopharma (ABIO)

Arca Biopharma (NASDAQ:ABIO) hasn’t had a positive catalyst since early 2024 when Arca announced plans to merge with Oruka Therapeutics. But now this clinical-stage biopharmaceutical firm boasts some of the highest short interest of any current stock. ABIO hasn’t benefited from the Roaring Kitty rally so far but investors should keep a close eye on it.

The stock boasts a Fintel short squeeze score of 98.79, with more than 83% of its shares being sold short. The borrow fee rate ABIO shares is $83.72. ABIO’s ranking on the short squeeze leaderboard has recently jumped 5 places. Granted, there are still 20,000 shares available to short. However, this little-known company is one of the most likely short-squeeze stocks to watch, and it currently trades at low levels. That could be tempting for speculative traders.

Rent the Runway (RENT)

Source: Wirestock Creators / Shutterstock

A few months ago, many people had written this fashion retailer off. Now Rent the Runway (NASDAQ:RENT) has watched its share prices more than double over the past month. Most of this growth isn’t meme stock momentum. Unlike GME and AMC, RENT actually started rising after a strong earnings report, which is exactly the kind of catalyst that investors should look for. But now it ranks highly on Fintel’s leaderboard of likely short-squeeze stocks.

While short interest accounts for only 19% of its float, as of this writing, there are no shares of RENT available to short and the cost to borrow shares is high, at $314. Overall, Rent the Runway boasts a short squeeze score of 97.73, one of the highest on the board.

Short-Squeeze Stocks: SilverSun Technologies (SSNT)

Source: rafapress / Shutterstock.com

This software company has been subject to significant volatility lately. SilverSun Technologies (NASDAQ:SSNT) is currently rising after taking multiple dips over the past month. It hasn’t had too many catalysts to report, but over the past two quarters, shares have managed to remain mostly in the green. Through it all, though, short sellers don’t seem to have much confidence in its growth prospects.

Short interest accounts for 25% of its float, and the cost to borrow shares is currently $16.49, with 40,000 shares available to short. This has led to SSNT receiving a short squeeze score of 96.61. This isn’t as high as the previous short-squeeze stocks, but it is still significant, making it a prime short-squeeze candidate.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.