One of the top performing stocks earlier this morning was Blue Coat Systems, Inc (BCSI). The stock has now pulled back from its best levels of the day but there are a couple of important points to keep in mind about this situation. The first is that the company is scheduled to report earnings tomorrow. The second point is that this is a heavily short stock.

According to data collected by our Quantified Analysis group, 18% of the stock's float is now sold short. As the chart to the right shows, short sellers took a renewed interest in this company in mid-May as total short interest is now 50% higher.

The put/call ratio, which is higher than 93% of the readings taken in the last year, also suggests skepticism. (Note - expiration did exert a small upward pull on the ratio but not enough for me to discount the reading.)

The last sentiment measure relates to the Street. Data from Zacks shows that 5 of 11 analysts (45 percent) rank the stock with a "buy" rating.

Overall, I would say the sentiment profile is skewed toward skepticism. However, a look to the weekly chart shows that is not out of line with the price action.

Chart Courtesy of Thomson Financial

Shares of BCSI have been locked in a steady downtrend since last October. Under that scenario, you would expect to see some skepticism. The heavy short interest does represent some potential buying demand, but first there needs to be a catalyst. A positive earnings report could spark that fire, but I think it is more prudent to wait and see if the company can deliver.