ZymoGenetics Inc (ZGEN) may not be a household name but the stock appears to be rather popular with traders. The company was in the news yesterday and the positive developments pushed the shares to a gain of more than 25%. The stock carries a heavy level of short interest so it popped up on today's short interest scan. But what caught my eye is that the stock is seeing some follow-through buying today. Here is what I see...

Chart Courtesy of Thomson Financial

This daily chart that shows the action since August. The stock gapped higher yesterday morning but gave back some of the gap as the day wore on. Today brings renewed interest as the shares are back to the best levels of yesterday, which is a gain of 20% from yesterday's close.

This action strikes me as somewhat peculiar. I normally would have viewed yesterday afternoon's pullback as a sign that the buying had run it course. Today's bounce back is especially noteworthy as it comes amid a weak broad market.

Going back to the daily chart, you could make the argument that the stock broke its downtrend in December, after it bottomed near 2. According to data collected by our Quantified Analysis group, 16% of the stock's float is currently sold short. With the stock showing signs of life, perhaps some of the shorts are covering?