This is a tale of 2 after-hours runners. Both spiked on earnings…
But only 1 kept going.
Which was the better stock to trade, and why?
The lesson is simple, but super important.
And it goes back to why my number one scan hasn’t changed…
Even after 25 years…
Why Big Percent Gainers Can Keep Going
The top percent gainers scan is one of, if not the most watched, scans traders use.
Some variation of the daily top percent gainers is built into every scanning platform.
And if you visit any financial website, a top-gainers widget is standard.
It makes sense, right?
Traders want to know what’s moving.
Everyone wants to know where the money is flowing in the markets.
That’s true whether you’re long-biased or short-biased.
So, why was one of these better than the other?
Start by taking a look at the after-hours charts below:
Source: StocksToTrade
MDAI 3/24/26 after-hours earnings, small percent gainer.
Spectral AI Inc. (MDAI) spiked 16.5% in about 8 minutes after it reported earnings on March 24.
The initial spike was okay, but then MDAI faded (and it never recovered).
On the same day, Blaize Holdings Inc. (BZAI) reported earnings. Notice the difference.
Source: StocksToTrade
BZAI 3/24/26 1-min candle, after-hours earnings, big percent gainer.
BZAI ran 46% in 14 minutes. Then, after a pullback and consolidation, it broke to new highs 40 minutes later.
So, you might wonder…
Did Earnings Make the Difference?
The answer is a resounding maybe. I know that’s not what you want to hear (but it’s reality).
You could read every word of the earnings call transcripts and find reasons why they deserved to spike.
You could also find reasons why they shouldn’t spike.
All that shows is your bias.
So, when it comes to trading stocks like BZAI and MDAI, I NEVER second-guess the market.
Instead, I base my decisions on what the market is telling me.
And the market was very clear…
Source: StocksToTrade
BZAI 3/24/26 after-hours spike and consolidation.
BZAI was where traders put their money.
But that still doesn’t explain why BZAI was so much better than MDAI.
It all comes down to which stock has…
Short Squeeze Firepower
While longs look for big percent gainers and then watch for a pullback to enter, short sellers approach it from a different mindset.
Short sellers hunt down big percent gainers because they are bitter, toxic lemons who want nothing more than to see every stock tank.
They’ll short a stock for any reason it doesn’t deserve to be up.
I know how short sellers think (I made millions short selling BEFORE it became so risky).
But they’re so desperate to be right that they get in too early.
So, big percent gainers are their top targets.
But right now, there are SO many overaggressive short sellers that it’s crowded. And THAT leads to…
Short Squeeze Spikers
This is exactly why stocks like BZAI can keep going. And why stocks like MDAI aren’t the best opportunity…
Source: StocksToTrade
MDAI 3/24/26 after-hours spike and fade.
Again, short sellers aren’t wrong. Most of these spikers fail (most of the companies fail).
But short sellers get in too early because they want to top tick for their social media posts.
You’ve probably seen a few. I won’t call out any names, but I WILL say..
Dear Short Sellers… Thank You for Your Sacrifice
Shorts just keep selling, selling, selling, all the way to the top (trying to average up).
But who are they selling to?
• Momentum buyers (who just want to scalp the squeeze).
• Other short sellers who are panic-buying to cover.
• And even longs who believe in the stock.
Eventually, the buying power runs out and the stock starts to fade (or consolidate).
That is, until enough short sellers get tired (or momentum buyers see a new opportunity).
And then…
It squeezes again.
The crazy thing is, this cycle can repeat over hours (or even days).
The Takeaway: Focus On Big Percent Gainers
If you start watching big percent gainers, you’ll begin to see this all play out.
You don’t even have to trade at first (just watch, or paper trade).
Once you see it happening, you can take advantage of big percentage gainers.
Especially if you understand how short sellers think.
LONG may their greed continue…
If you have any questions, email me at SykesDaily@BanyanHill.com.
Cheers,
Tim Sykes
Editor, Tim Sykes Daily
