Comparing a stock's trading trends to its changes in number of shares shorted can lead to some interesting results.
We ran a screen on the biotech industry for stocks rallying above their 20-day, 50-day, and 200-day moving averages. We then screened these stocks for those with significant increases in shares shorted month-over-month, indicating short sellers expect these names to turn in the other direction.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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.
Do you think these stocks' rallies are coming to an end? Use this list as a starting point for your own analysis.
1. Corcept Therapeutics Inc. (NASDAQ:CORT): Engages in the discovery and development of drugs for the treatment of severe metabolic and psychiatric disorders. The stock is currently rallying 16.70% above its 20-day moving average, 17.97% above its 50-day MA, and 15.56% above its 200-day MA. Shares shorted have increased from 2.76M to 3.62M over the last month, an increase which represents about 1.7% of the company's float of 50.56M shares.
2. Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX): Focuses on the discovery and development of drug candidates for the treatment of various human diseases. The stock is currently rallying 1.10% above its 20-day moving average, 19.00% above its 50-day MA, and 26.95% above its 200-day MA. Shares shorted have increased from 9.37M to 11.60M over the last month, an increase which represents about 1.6% of the company's float of 139.17M shares.
3. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders. The stock is currently rallying 7.96% above its 20-day moving average, 2.23% above its 50-day MA, and 19.95% above its 200-day MA. Shares shorted have increased from 6.96M to 10.57M over the last month, an increase which represents about 6.1% of the company's float of 59.19M shares.
*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.