Joy Global primed for a short squeeze, J.P. Morgan says

J.P. Morgan analysts ponder the potential upside in Joy Global (JOY -1.6%), one of the market’s heavily shorted stocks, when it releases earnings next week and says JOY could be poised for a short squeeze.

Any positive news could present upside risk opportunity, as commentary from mining companies remains negative; for example, Cliffs Natural Resources earlier this week cut its capex budget by $100M (or ~25%).

The firm says JOY is one of the most heavily shorted names in its coverage universe, and any positive news could present upside risk in the form of a “short squeeze.” While we The firm remains Neutral on JOY, which faces a challenging outlook for mining equipment demand, but it recommends investors capitalize on upside risk to the earnings report through options.

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