Stocks Advancing Amid Heavy Short Interest - American International Group Inc, Fannie Mae, Texas Roadhouse Inc, Peet's Coffee & Tea Inc

As explained in our education section, short interest is a useful sentiment indicator that measures the level of investor pessimism toward a stock. While it isn't always a simple "long only" indicator, it can give you insight into situations where you might see concentrated buying demand. The purpose of this post is to highlight heavily-shorted stocks that could be in the midst of a potential short covering rally. More details about the methodology are listed below.

Companies included in today's scan are: Landry's Restaurants (LNY), Hecla Mining (HL), Maguire Properties Inc (MPG), Sonic Solutions (SNIC), Texas Roadhouse Inc (TXRH), Capitol Bancorp. (CBC), American International Group Inc (AIG), Canadian Solar Inc. (CSIQ), Great Atlantic & Pacific Tea (GAP), Fannie Mae (FNM), Morgans Hotel Group Co. (MHGC), InterMune (ITMN), Peet's Coffee & Tea Inc (PEET), Human Genome Sciences (HGSI), Energy Conversion Devices, Inc (ENER), iStar Financial (SFI), PMI Group (PMI), Jazz Pharmaceuticals, Inc. (JAZZ), Cascade Bancorp (CACB), C&D Technologies (CHP), Media General (MEG), Hovnanian Enterprises (HOV), Gannett Co. (GCI), Vonage Holdings Corp. (VG), Freddie Mac (FRE).

Methodology - the query scans my database of companies which has some basic filters to eliminate stocks that don't trade frequently. The table above is a filtered list of stocks that have at least 10 percent of their float sold short and showed a gain in the previous trading day. I use this as a tool for finding situations where stocks with heavy short interest have begun to move.

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