Speculation growing that Shorts might be sent scrambling to cover positions following a new bullish trend sweeping through the summer market.

Shares of Atlanticus Holdings Corporation (NASDAQ:ATLC) have a tendency to rise quickly, just as they did in last two minutes trading action on “Short Squeeze Friday” when the stock rose 14% and a few more clicks during after-market hours.

What caused the sudden spike to happen so quickly?

Leading traders and chat rooms speculate that the Shorts – who currently control 28.94% of the company’s tiny float – were sent scrambling to cover as volume and buying came in during the closing minutes of Power Hour.

ATLC became the latest example of a bullish trend sweeping through the summer market.

Cameron Newell of Normac Newell Trading put out a note alerting his followers and others that the stock could be primed for another bull run. “The trend lately has been low float stocks that run 5-15% during the day then they gap up 50-200% at market open,” wrote Newell.

He also lists Nortech Systems Incorporated (NASDAQ:NSYS), Westmoreland Resource Partners (NYSE:WMLP), Oxbridge Re Holdings Limited (NASDAQ:OXBR) and Universal Security Instruments, Inc. (AMEX:UUU) as the most recent examples of the trend.

Newell, who built his reputation after turning $1,000 into $1 million, leads just one of several trading groups who have put the stock on watch for their subscribers and that has to have Shorts sitting on the “cover” button, ready to execute before any kind of volume swells into a squeeze.

A few days ago, shares of the company hit a 52 week high of $3.83 following a positive earnings announcement.  That was enough for the Bulls to rush in and trade over 9.4 Million shares of a stock that only has 3.17 million in the float. Since then, however, things had been quieting down. Shares had been mostly consolidating and finding solid support around the $1.70 mark during the last few sessions. That makes ATLC a low risk trade at these levels.

In the book New Strategy of Daily Stock Market Timing for Maximum Profit, Joe Granville’s book wrote that “stocks do not rise in price unless demand exceeds supply. Demand is measured in volume and thus volume must precede price.” In other words, if people start coming in and buying up shares of an already limited float, things can get exciting for the Bulls.

Short Pain Bot, a website that quantifies the pain that shorts feel daily, and acts as a starting point for experienced investors and traders looking for potential short squeezes has also noted the ready-for-prime-time status of ATLC.

As it stands, 17.7% of the Atlanticus’ shares are held by Institutional Owners (Top 15 Funds) and 79.4% of the rest are “very closely held” by insiders according to a company spokesman. That doesn’t leave may shares to buy and trade and that’s where things could get interesting once the stock’s anemic volume disappears under some buying pressure.

A week and a half ago, shares of Avalon Holdings Corporation (AMEX:AWX) soared from $7 to $26 after the company disclosed that MintBroker International had acquired 1,922,095 of its shares. The action trapped a significant number of Short traders who scrambled to cover their positions at much higher prices than they ever anticipated “on no news.”

Shares of Volkswagen AG (OCTMKTS:VLKAY) rocketed on Tuesday, when short sellers were caught betting on a price drop with borrowed stock. They scrambled to find shares after a buying spree by Porsche and were forced to pay as much as 1,005 euros a share- desperate to close their positions following Sunday’s news that there was less than 6 percent of VW voting stock still floating in the market.

“A break over $1.90 is key,” wites Newell. That would also get the ATLC stock trading back above the 50 Day Moving Average.