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If you are looking for short ideas, this article can offer an interesting starting point for your own analysis. To construct this list we looked for stocks with three characteristics:

  • RSI(14) under 40.
  • Short float greater than 10%.
  • Increasing short interest during the month of May.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Taking this information into account, it seems like both the market and short sellers believe some of these names are bound to go lower.

1. LDK Solar Co., Ltd. (LDK): Semiconductor Industry. Market cap of $1.05B. RSI(14) at 37.54. Short float at 21.14%. Shorted shares have increased from 23.60M to 31.51M shares, this change is equivalent to 14.13%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.66). The stock has performed poorly over the last month, losing 18.51%.

2. hiSoft Technology International Ltd. (HSFT):
Business Software & Services Industry. Market cap of $413.51M. RSI(14) at 25. Short float at 10.67%. Shorted shares have increased from 1.17M to 3.22M shares, this change is equivalent to 10.59%. The stock is a short squeeze candidate, with a short float at 10.67% (equivalent to 8.77 days of average volume). The stock has performed poorly over the last month, losing 11.39%.

3. VanceInfo Technologies Inc. (VIT):
Information Technology Services Industry. Market cap of $917.49M. RSI(14) at 31.5. Short float at 12.62%. Shorted shares have increased from 2.95M to 5.13M shares, this change is equivalent to 9.21%. The stock is a short squeeze candidate, with a short float at 12.62% (equivalent to 5.25 days of average volume). The stock has performed poorly over the last month, losing 20.19%.

4. AsiaInfo-Linkage,Inc. (ASIA):
Security Software & Services Industry. Market cap of $1.03B. RSI(14) at 26.35. Short float at 21.65%. Shorted shares have increased from 7.41M to 10.37M shares, this change is equivalent to 6.56%. The stock is a short squeeze candidate, with a short float at 21.65% (equivalent to 10.21 days of average volume). The stock has performed poorly over the last month, losing 27.62%.

5. Silicon Graphics International Corp. (SGI): Diversified Computer Systems Industry. Market cap of $456.17M. RSI(14) at 36.05. Short float at 11.12%. Shorted shares have increased from 2.25M to 3.40M shares, this change is equivalent to 4.02%. The stock is a short squeeze candidate, with a short float at 11.12% (equivalent to 5.57 days of average volume). The stock has performed poorly over the last month, losing 17.3%.

6. Savient Pharmaceuticals, Inc. (SVNT): Biotechnology Industry. Market cap of $490.89M. RSI(14) at 28.58. Short float at 30.51%. Shorted shares have increased from 19.06M to 21.42M shares, this change is equivalent to 3.95%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.18). The stock is a short squeeze candidate, with a short float at 30.51% (equivalent to 10.81 days of average volume). The stock has performed poorly over the last month, losing 15.73%.

7. PDL BioPharma, Inc. (PDLI): Biotechnology Industry. Market cap of $811.54M. RSI(14) at 35.85. Short float at 13.89%. Shorted shares have increased from 15.06M to 19.38M shares, this change is equivalent to 3.59%. The stock is a short squeeze candidate, with a short float at 13.89% (equivalent to 7.42 days of average volume). The stock has gained 16.9% over the last year.

8. SuccessFactors, Inc. (SFSF): Business Software & Services Industry. Market cap of $2.42B. RSI(14) at 39.39. Short float at 15.3%. Shorted shares have increased from 9.59M to 11.88M shares, this change is equivalent to 2.92%. The stock is a short squeeze candidate, with a short float at 15.3% (equivalent to 9.41 days of average volume). The stock has gained 35.68% over the last year.

9. AnnTaylor Stores Corp. (ANN): Apparel Stores Industry. Market cap of $1.38B. RSI(14) at 33.44. Short float at 16.66%. Shorted shares have increased from 7.29M to 8.51M shares, this change is equivalent to 2.81%. The stock has performed poorly over the last month, losing 14.25%.

10. Tesoro Corporation (TSO): Oil & Gas Refining & Marketing Industry. Market cap of $3.0B. RSI(14) at 30.88. Short float at 10.52%. Shorted shares have increased from 11.23M to 14.96M shares, this change is equivalent to 2.65%. The stock has performed poorly over the last month, losing 14.54%.

Data sourced from Yahoo Finance and Finviz.

Source: Top 10 Oversold Stocks Experiencing Increasing Short Interest