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The following is a list of small cap stocks in rally mode, i.e. trading above their 20-day, 50-day and 200-day moving averages. In addition, all of these stocks have seen a significant increase in shares shorted, signaling an incremental skepticism of the rally by short sellers.

To compile this list we started with a universe of over 200 stocks with market caps between $100-$300M. We then sorted them by short float and looked at the change in shares shorted from January 28 to February 28. We ultimately found the 12 stocks mentioned below.

Given the significant rally of these stocks and the bearish outlook expressed by the short sellers’ positions, this may be an interesting starting point for investors looking to short overvalued small-cap stocks. On the other hand, a potential short squeeze could push some of these names higher…Full details below.



The list has been sorted by the change in shares shorted over the last month.

1. Glu Mobile, Inc. (NASDAQ:GLUU): Multimedia & Graphics Software Industry. Market cap of $182.74M. The stock is currently 6.58% above its 20-day MA, 16.34% above its 50-day MA, and 97.14% above its 200-day MA.

Short float 8.12%. Shorted shares increased by 341.98%, from 696.86K shares to 3.08M shares.

Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.2). The stock has performed poorly over the last month, losing 12.95%.

2. FSI International Inc. (NASDAQ:FSII): Semiconductor Equipment & Materials Industry. Market cap of $168.85M. The stock is currently 14.18% above its 20-day MA, 8.01% above its 50-day MA, and 17.82% above its 200-day MA.

Short float 6.3%. Shorted shares increased by 17.74%, from 1.86M shares to 2.19M shares.

3. Conexant Systems Inc. (NASDAQ:CNXT-RETIRED): Semiconductor Industry. Market cap of $196.27M. The stock is currently 0.29% above its 20-day MA, 3.52% above its 50-day MA, and 25.51% above its 200-day MA.

Short float 5.49%. Shorted shares increased by 17.74%, from 3.27M shares to 3.85M shares. The stock has lost 32.68% over the last year.

4. Summer Infant, Inc. (NASDAQ:SUMR): Personal Products Industry. Market cap of $116.32M. The stock is currently 3.69% above its 20-day MA, 1.74% above its 50-day MA, and 0.16% above its 200-day MA.

Shorted shares increased by 14.14%, from 602.23K shares to 687.36K shares.

The stock is a short squeeze candidate, with a short float at 6.3% (equivalent to 7.18 days of average volume). The stock has had a couple of great days, gaining 5.49% over the last week.

5. Amtech Systems Inc. (NASDAQ:ASYS): Semiconductor Equipment & Materials Industry. Market cap of $233.27M. The stock is currently 11.99% above its 20-day MA, 3.34% above its 50-day MA, and 36.51% above its 200-day MA.

Short float 7.82%. Shorted shares increased by 9.81%, from 555.26K shares to 609.75K shares. The stock has had a couple of great days, gaining 13.92% over the last week.

6. eHealth, Inc. (NASDAQ:EHTH): Insurance Brokers Industry. Market cap of $272.43M. The stock is currently 1.18% above its 20-day MA, 3.51% above its 50-day MA, and 3.16% above its 200-day MA.

Shorted shares increased by 9.16%, from 5.24M shares to 5.72M shares.

The stock is a short squeeze candidate, with a short float at 24.6% (equivalent to 15.11 days of average volume). The stock has lost 23.18% over the last year.

7. TriCo Bancshares (NASDAQ:TCBK)
: Regional Bank. Market cap of $252.17M. The stock is currently 4.55% above its 20-day MA, 3.95% above its 50-day MA, and 3.46% above its 200-day MA.

Short float 6.18%. Shorted shares increased by 7.74%, from 749.69K shares to 807.70K shares. The stock is a short squeeze candidate, with a short float at 6.18% (equivalent to 31.21 days of average volume). The stock has had a couple of great days, gaining 6.28% over the last week.

8. DragonWave Inc. (NASDAQ:DRWI): Communication Equipment Industry. Market cap of $263.63M. The stock is currently 4.86% above its 20-day MA, 3.77% above its 50-day MA, and 9.68% above its 200-day MA.

Short float 6.41%. Shorted shares increased by 7.1%, from 1.83M shares to 1.96M shares.

Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.05). The stock has had a couple of great days, gaining 5.34% over the last week.

9. UQM Technologies Inc. (NYSEMKT:UQM): Industrial Electrical Equipment Industry. Market cap of $106.18M. The stock is currently 3.57% above its 20-day MA, 0.61% above its 50-day MA, and 9.27% above its 200-day MA.

Shorted shares increased by 6.37%, from 3.14M shares to 3.34M shares.

The stock is a short squeeze candidate, with a short float at 10.05% (equivalent to 11.59 days of average volume). The stock has performed poorly over the last month, losing 10.94%.

10. CoBiz Financial Inc (NASDAQ:COBZ): Regional Bank. Market cap of $254.47M. The stock is currently 3.02% above its 20-day MA, 6.15% above its 50-day MA, and 18.24% above its 200-day MA.

Shorted shares increased by 5.66%, from 2.65M shares to 2.80M shares.

Relatively low correlation to the market (beta = 0.7), which may be appealing to risk averse investors. The stock is also a short squeeze candidate, with a short float at 9.26% (equivalent to 23.49 days of average volume). The stock has gained 15.19% over the last year.

11. Flotek Industries Inc. (NYSE:FTK): Oil & Gas Equipment & Services Industry. Market cap of $249.25M. The stock is currently 20.91% above its 20-day MA, 23.14% above its 50-day MA, and 143.19% above its 200-day MA.

Short float 10.05%. Shorted shares increased by 5.32%, from 3.95M shares to 4.16M shares.

12. Rentrak Corporation (NASDAQ:RENT): Movie Production, Theaters Industry. Market cap of $295.63M. The stock is currently 5.4% above its 20-day MA, 0.58% above its 50-day MA, and 2.2% above its 200-day MA.

Shorted shares increased by 5.07%, from 503.58K shares to 529.09K shares.

The stock is a short squeeze candidate, with a short float at 5.71% (equivalent to 13.52 days of average volume). The stock has had a couple of great days, gaining 5.74% over the last week.

*Shorted shares sorted from Yahoo! Finance, all other data sorted from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Squeeze Ideas: 12 Rallying Small Cap Stocks Being Targeted by Short Sellers