Retailers are proceeding with caution this holiday season, according to forecasts released Thursday by the industry trade group, the National Retail Federation.

CNBC reports: "Holiday retail sales are expected to rise 2.8 percent to $465.6 billion, the NRF predicts. This growth, while far slower than last year's 5.2 percent gain, is slightly higher than the 10-year average holiday sales gain of 2.6 percent, the group said."

Retailers are feeling more optimistic about this year's holiday sales thanks to strong promotions and lean inventory levels. These cautionary measures insure they are in a better position to handle consumer uncertainty than in prior years when stores were left with excess inventory.

The usual suspects are at play in consumer uncertainty: high unemployment, rising costs, modest income growth, volatile markets, and unclear forecasts in market growth.

Retailers hope a few factors would boost holiday season spending, including an increase in sales over 14 consecutive months and a gradual decrease in household debt. "But with consumer confidence remaining at depressed levels, it is unclear how sustainable this is." Furthermore, it may take more time before America's cash-strapped consumers are quick to spend, even on the holidays.

The unemployment rate may also dip during the holiday season as "The NRF predicts the industry will hire between 480,000 and 500,000 seasonal workers this year. The NRF said this is comparable to the 495,000 seasonal employees that were hired last year." It will be interesting to see whether seasonal income will be spent or saved.

Retailers are playing a "wait and see" game for the holiday season; maybe we'll end up seeing stronger than expected holiday retail sales.

But which companies are expected to see the biggest reversals?

To help you explore some ideas, here's a list of consumer stocks that might be worth a closer look (at least in the short term, if you like to track short-seller trends).

To create this list, we started with a universe of retailers that have been dragged down by the market's recent weakness.

To refine the quality of the list, we collected data on short trends, and identified the retail stocks that have seen a significant decrease in shares shorted over the last month (i.e., short-sellers have reduced bets that these stocks will decline)

Short-sellers appear to think the upside potential of these consumer stocks outweighs the downside potential -- do you agree? (Click here to access free, interactive tools to analyze these ideas.)

1. DSW (NYSE: DSW): Operates as a specialty branded footwear retailer in the U. Shares shorted have decreased from 3.82M to 2.11M over the last month, a decrease which represents about 6.79% of the company's float of 25.20M shares.

2. Aeropostale (NYSE: ARO): Designs, markets, and sells casual sportswear and other fashion merchandise under its own brands, principally targeted at customers 11 to 18 years old. Shares shorted have decreased from 14.24M to 13.13M over the last month, a decrease which represents about 1.39% of the company's float of 80.00M shares.

3. Collective Brands (NYSE: PSS): Engages in the wholesale and retail of footwear and related accessories worldwide. Shares shorted have decreased from 20.33M to 19.53M over the last month, a decrease which represents about 1.45% of the company's float of 55.24M shares.

4. Pacific Sunwear of California (Nasdaq: PSUN): Operates as a retailer rooted in the action sports, fashion, and music influences of the California lifestyle. Shares shorted have decreased from 8.61M to 8.13M over the last month, a decrease which represents about 1.34% of the company's float of 35.86M shares.

5. DineEquity (NYSE: DIN): Develops, franchises, and operates full-service restaurant chains in the United States and internationally. Shares shorted have decreased from 1.92M to 1.74M over the last month, a decrease which represents about 1.16% of the company's float of 15.50M shares.

6. SUPERVALU (NYSE: SVU): Operates retail food stores in the United States. Shares shorted have decreased from 53.12M to 49.52M over the last month, a decrease which represents about 1.71% of the company's float of 210.26M shares.

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 Eben Esterhuizen does not own any of the shares mentioned above. Short data sourced from Yahoo! Finance.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.