While the broad market indices meander with slight losses, shares of CIT Group Inc (CIT) are on the move. The stock is up 15% today and up 175% over the last two weeks. Digging into the sentiment profile suggests we may have a short squeeze situation on our hands.

The chart to the right shows us that total short interest has been steadily rising for the last few months. According to data collected by our Quantified Analysis group, 17% of the stock's float is now sold short.

For much of this time, these have been smart bets against the stock. The weekly chart below shows the severity of the downtrend. Since peaking last summer, the stock dropped from around 60 to its recent lows below 2. However, since the late-November lows, the stock seems to have found a steady supply of buyers.

The second chart below shows the intraday action for the last two weeks. Since hitting the low, the stock has traded as if there is a steady bid under it. This could be a situation where short sellers have begun to buy back the shares and take their profits. Once that starts, there is a potential rush for the exits in which buying begets more buying. In terms of overhead resistance, the shares should encounter some headwinds if they push through 6. That area marked the site of the early-November "mini-peak" and was also support back in July.

Chart Courtesy of Thomson Financial

Chart Courtesy of Thomson Financial