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Two very helpful sentiment indicators are the put/call ratio and shares shorted. Decreases in either the put/call ratio or the number of shares shorted are considered bullish changes in sentiment surrounding a stock.

We screened stocks under $3 for those that have seen bullish changes in these two indicators, with decreases in the put/call ratio over the last ten trading days and decreases in share shorted month-over-month.

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.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


(Click to enlarge)

Do you agree with the bullish sentiment? Use this list as a starting-off point for your own analysis.

List sorted by decrease in shares shorted.

1. China Valves Technology, Inc. (OTC:CVVT): Industrial Equipment & Components Industry. Market cap of $107.72M. Price at $2.86. Put/call ratio has fallen 8.0% over the last ten trading days (from 0.75 to 0.69). Shares shorted have decreased from 3.10M to 2.77M month-over-month, a change representing 1.63% of the company's 20.21M share float. The stock is a short squeeze candidate, with a short float at 12% (equivalent to 11.32 days of average volume). It's been a rough couple of days for the stock, losing 5.03% over the last week.

2. Eagle Bulk Shipping, Inc. (NASDAQ:EGLE): Shipping Industry. Market cap of $110.73M. Price at $1.71. Put/call ratio has fallen 11.52% over the last ten trading days (from 2.17 to 1.92). Shares shorted have decreased from 6.92M to 6.15M month-over-month, a change representing 1.39% of the company's 55.21M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.32). The stock is a short squeeze candidate, with a short float at 9.99% (equivalent to 5.9 days of average volume). It's been a rough couple of days for the stock, losing 25% over the last week.

3. RadNet, Inc. (NASDAQ:RDNT): Medical Laboratories & Research Industry. Market cap of $105.24M. Price at $2.62. Put/call ratio has fallen 33.33% over the last ten trading days (from 0.03 to 0.02). Shares shorted have decreased from 1.76M to 1.47M month-over-month, a change representing 1.11% of the company's 26.21M share float. The stock is currently stuck in a downtrend, trading 29.02% below its SMA20, 37.22% below its SMA50, and 25% below its SMA200. It's been a rough couple of days for the stock, losing 24.8% over the last week.

4. Beazer Homes USA Inc. (NYSE:BZH): Residential Construction Industry. Market cap of $163.81M. Price at $2.02. Put/call ratio has fallen 8.33% over the last ten trading days (from 0.60 to 0.55). Shares shorted have decreased from 16.32M to 15.69M month-over-month, a change representing 1.01% of the company's 62.10M share float. The stock is a short squeeze candidate, with a short float at 20.85% (equivalent to 8.09 days of average volume). It's been a rough couple of days for the stock, losing 25.86% over the last week.

5. MGIC Investment Corp. (NYSE:MTG): Property & Casualty Insurance Industry. Market cap of $639.63M. Price at $2.71. Put/call ratio has fallen 27.03% over the last ten trading days (from 1.11 to 0.81). Shares shorted have decreased from 23.01M to 21.40M month-over-month, a change representing 0.87% of the company's 184.66M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.07). It's been a rough couple of days for the stock, losing 20.1% over the last week.

6. SuperGen Inc. (SUPG): Drug Manufacturers Industry. Market cap of $153.94M. Price at $2.46. Put/call ratio has fallen 12.50% over the last ten trading days (from 0.08 to 0.07). Shares shorted have decreased from 4.19M to 3.87M month-over-month, a change representing 0.63% of the company's 50.94M share float. The stock is a short squeeze candidate, with a short float at 6.71% (equivalent to 7.7 days of average volume). It's been a rough couple of days for the stock, losing 16.67% over the last week.

7. Acura Pharmaceuticals Inc. (NASDAQ:ACUR): Drug Delivery Industry. Market cap of $135.05M. Price at $2.71. Put/call ratio has fallen 12.12% over the last ten trading days (from 0.66 to 0.58). Shares shorted have decreased from 1.15M to 1.08M month-over-month, a change representing 0.61% of the company's 11.57M share float. The stock is currently stuck in a downtrend, trading 18.47% below its SMA20, 29.65% below its SMA50, and 22.59% below its SMA200. The stock has performed poorly over the last month, losing 23.2%.

8. Cerus Corporation (NASDAQ:CERS): Biotechnology Industry. Market cap of $108.05M. Price at $2.19. Put/call ratio has fallen 22.22% over the last ten trading days (from 0.09 to 0.07). Shares shorted have decreased from 4.39M to 4.13M month-over-month, a change representing 0.56% of the company's 46.18M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.3). The stock is a short squeeze candidate, with a short float at 8.94% (equivalent to 13.7 days of average volume). It's been a rough couple of days for the stock, losing 18.05% over the last week.

9. Gulf Resources, Inc. (NASDAQ:GURE): Specialty Chemicals Industry. Market cap of $100.40M. Price at $2.67. Put/call ratio has fallen 8.33% over the last ten trading days (from 1.20 to 1.10). Shares shorted have decreased from 4.09M to 3.98M month-over-month, a change representing 0.52% of the company's 21.25M share float. The stock is currently stuck in a downtrend, trading 24.07% below its SMA20, 18.9% below its SMA50, and 60.79% below its SMA200. It's been a rough couple of days for the stock, losing 17.43% over the last week.

*Options data sourced from Schaeffer’s, short data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 9 Stocks Under $3 With Bullish Options Sentiment and Short Trends