4 Lessons From the CAR Short Squeeze

You saw it, right?

CAR finally drove off a cliff.

I know MANY big short sellers who were averaging up from the $200s, $300s, even into the $700s.

It takes a certain kind of narcissist to believe they’re right, even when the price action goes against them hundreds of dollars per share.

“It can’t keep going, right?”

WRONG!

But no big short seller will admit it.

So, all the toxic groupthink Discords full of short sellers pretend it’s not them.

They finally got what they wanted (but for many it was WAY too late)…

Avis Budget Group Inc. (CAR) crashed last Wednesday (April 22).

After hitting an all-time high of $847.70, it dropped 47.6% to close at $443.94.

Officially, it only lost 37.8% (based on the previous day’s close).

Still, that’s pretty crazy, right?

But it’s not as unusual as it seems.

Short squeezes happen all the time.

And while a lot of people want to lean into manipulation stories and conspiracy theories…

The only thing that matters to you and me is that CAR is just another example of a pattern that happens again, and again, and again…

With that in mind, here are 4 lessons from another epic short squeeze…

Short Squeeeeeeeze!

Check out the CAR one-year chart…

Source: StocksToTrade

CAR 1-yr 1-day candles, short squeeze supernova, #4 cliff dive.

If you aren’t familiar with short squeezes (or short selling), it’s the act of betting against a company’s share price, expecting it to decline.

With this strategy, you borrow shares to sell them at the current market price, with the intention of buying them back at a lower price later.

CAR was the perfect example. So let’s get right to it…

CAR Short Squeeze Lesson 1: The “Why” Doesn’t Matter

I get this a lot… There’s a big short squeeze like CAR and the conspiracy theories start to fly:

“I think I’d call this pattern … MANIPULATION.”

Or…

“Um, you do realize it was hedge funds that controlled the majority of shares that manufactured this squeeze, right?”

LOL. Welcome to the stock market in 2026.

There is an overabundance of short sellers (and there are literally THOUSANDS of short squeeze examples).

More importantly, it doesn’t matter.

Whether it’s two hedge funds tying up more shares than the public float…

An old school pump-&-dump…

Or for any other reason…

When overaggressive shorts start to pile on, and it goes against them, they either have to cover (driving the price up) or blow up.

There’s ZERO mystery about the numbers.

CAR Short Squeeze Lesson 2: You Can Be Right and Still Blow Up

Imagine being short CAR, with the price action going against you hundreds of dollars per share, trying to defend your position when someone asks how the trade is going.

Seriously. Not only did that happen with CAR, it happens with short squeezes all the time.

These narcissists don’t listen to anyone outside of their toxic moron sphere.

It doesn’t matter if a stock is overextended, doesn’t deserve to be so high, and will eventually crack.

In fact, many shorts blew up on CAR (or were on the verge of blowing up).

The crazy thing?

It’s only weeks and days after several shorts blew up accounts on urban-gro Inc. (UGRO) and Allbirds Inc. (BIRD).

Among MANY other short squeezes.

Again, it’s not that they weren’t right about the stocks. They just can’t help themselves when it comes to timing.

Still…

CAR Short Squeeze Lesson 3: We Are Eternally Grateful for Short Sellers’ Stupidity

Seriously. Shady short sellers deserve so much recognition for the incredible sacrifices they make for the greater good.

Source: StocksToTrade

CAR 4/6-23/26 15-min candle, short squeeze and epic #4 crack

Their pathetic ways pave the way for great longs (over and over and over again).

So, be eternally grateful for their idiocy, stubbornness and ego.

A message for any newbie short sellers reading this…

If you had any idea how bad the “veteran” and “expert” short sellers are doing the past couple of years, there’s no way you’d continue.

That said, thank you. Please never change. Never study. Never adapt.

Keep pretending you’re okay because my students and I LOVE these epic short squeezes.

Finally…

CAR Short Squeeze Lesson 4: Short Selling Is NOT for Newbies or Small Accounts

It’s not worth it.

I DO think you should learn how short sellers think (and how short squeezes work).

I’m proud of my students who’ve learned to short-sell. But the successful ones have a deep understanding of the setups.

And even they take “paper cuts” trying to short the front side of a monster squeeze.

I’ve made millions shorting… And I don’t short any more (it’s WAY too risky).

But you DO need to understand short selling and how shorts think if you want to take advantage of opportunities like the CAR short squeeze.

My advice: Don’t short until you are great at going long and REALLY understand the danger of short selling.

Once you’ve seen enough squeezes, you can decide if it’s worth it for you.

If you have any questions, email me at [email protected].

Cheers,

Tim SykesEditor, Tim Sykes Daily