These Shorts Could Get Squeezed

Updated from 7:59 a.m. EDT

The stock market has taken a couple of hits lately. When a stock drops sharply, it may create some interesting short-squeeze opportunities.

A short squeeze takes place when a stock's short-sellers are forced to cover their bearish positions quickly on positive news that drives the stock price higher. This short-covering then works to drive the price of the stock up even more. The main metric for measuring a short-squeeze play is the short ratio, which represents the number of days it would take a stock's short sellers to cover their position based on the stock's recent average daily trading volume.

Stockpickr has compiled a list of the top Nasdaq short-squeeze plays for August, including MGE Energy(MGEE Quote - Cramer on MGEE - Stock Picks) and First Busey(BUSE Quote - Cramer on BUSE - Stock Picks).

To read more, and for the top Nasdaq short-squeeze plays for August, please click here.