Two Stocks for a Short Squeeze (BKS, NTRI)

As the market gains and gains with no downside in sight, a good play here could be a Short Squeeze. Two potential Short Squeeze candidates are Barnes & Noble, Inc. (NYSE:BKS) and NutriSystem Inc. (NTRI).

Barnes & Noble, Inc. (NYSE:BKS)
Short % of Float (as of 27-Oct-09) 34.9%

With strong demand for Barnes & Noble's new ebook reader the Nook, shares of BKS aren't going down anytime soon. In October, the nation’s largest bookstore chain told its first wave of customers for the $259 Nook that the wireless device would ship Nov. 30. A second wave of customers was told it would ship Dec. 7. A third wave was told that their pre-orders would ship Dec. 11

NutriSystem Inc. (NTRI)
Short % of Float (as of 27-Oct-09) 33.6%

NTRI recently reported less-than-stellar Q3 earnings. Their direct channel represented 93% of revenue - net sales through the direct channel were $118.6 million and $392.4 million in the three and nine months ended September 30, 2009, respectively, compared to $149.5 million and $531.1 million in the comparable periods of 2008. The decrease in 2009 is primarily attributable to the decline in customer starts due to the weakening economy.

In spite of the bad numbers, don't count on NTRI shares to drop any time soon, thanks to their announcement that they have inked a deal with Wal-Mart (WMT), the worlds largest retailer, to distribute their 14 Day Starter Program (click to read previous article on the subject)

As more and more Shorts get squeezed, NTRI should continue to see strength.