Here's Where To Look For A Short Squeeze In The Reopening Restaurant Space

Dine-in restaurants reopened at 25% capacity in New York over the weekend, and analysts are expecting a sharp rebound in struggling restaurant stocks this year.

Danielle Shay, director of options at Simpler Trading, said Friday that one restaurant stock to watch in the near-term is short squeeze candidate Jack in the Box Inc. JACK.

Watching Jack In The Box: The WallStreetBets-fueled GameStop Corp. GME short squeeze has traders looking for short squeeze opportunities elsewhere. Shay told CNBC that Jack in the Box could be the best potential short squeeze play in the restaurant group.

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“I like Jack in the Box here, but for a short-term options trade. Jack in the Box is right up near previous all-time highs. It has high short interest. Normally I don’t like trading tickers near highs, but with something like this that has high short interest it does have the potential for a short squeeze,” Shay said.

Jack in the Box also has a catalyst right around the corner in its upcoming earnings report due out on Wednesday. The stock currently has about 9.2% short interest, according to FactSet.

While casual dining restaurants are starting their long march back to pre-pandemic business levels, Shay said she will be focusing on fast food stocks, such as Jack in the Box and her preferred longer-term play McDonald's Corp MCD.

See also: How to Make Money on a Short Squeeze

Benzinga’s Take: Investors monitoring the restaurant space for potential short squeezes should also keep an eye on Burgerfi International Inc BFI and Dave & Buster's Entertainment Inc PLAY. Dave & Busters has a 21.9% short percent of float and Burgerfi has a 35.3% short percent of float, according to Finviz.

Photo courtesy of Jack in the Box.