What: Shares of InvenSense (NYSE:INVN) have bounced back today following an earnings-related sell-off yesterday. Shares are up 9% as of 3 p.m. ET.

So what: Investors were unimpressed with last quarter's results. While last quarter's figures themselves weren't all that bad, it was really guidance that knocked shares lower. The mobile market continues to decelerate, which will weigh on next quarter's results since InvenSense still relies heavily upon smartphones. With shares testing lows after earnings, a little bit of a bounce is not unexpected.

Now what: It's also worth noting that ever investors have been bearish on InvenSense for quite some time after it failed to score a critical smartwatch design win. Traders have been playing on that negative sentiment and exacerbating the decline. As of mid-January, short interest stood at 15.3 million shares. That total represents 5.6 days to cover and over 19% of float. There's a possibility that some of those shorts are now buying shares to close out their positions and lock in gains. Interestingly, short interest actually declined between late December and mid-January, yet shares have fallen (much like the rest of the market), which suggests that maybe long investors are also losing faith.