The following S&P 500 stocks have all seen a significant slowdown in short-selling activity over the last month.
This signals bullish sentiment among short-sellers, who think these names are rebound-ready.
Short-selling is an investment technique that allows an investor to make money when the value of a stock falls. Short-sellers, however, lose money when the share price rises.
And because share prices could rise to infinity, a reckless short position could lead to incredibly large losses.
Because short-selling requires borrowing, an individual or institution must meet several requirements (including background checks) to engage in short-selling. Thus, in general, short-sellers are more sophisticated than the average investor.
In general, when there is an increase in short-selling, short-sellers seem to think the names will drop in value. When there is a decrease in short-selling, short-sellers seem to think the names will rise in value.
All of the names mentioned here are stuck in a downtrend, but short-sellers seem to think most of the bad news is priced into these stocks -- do you agree? (Click here to access free, interactive tools to analyze these ideas.)
3. First Solar
4. Allegheny Technologies
5. NYSE Euronext
6. Novellus Systems
7. R.R. Donnelley & Sons
10. International Game Technology
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Becca Lipman does not own any of the shares mentioned above.
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