As discussed here, I have resurrected a scan that focuses on companies that are heavily shorted. The purpose is to find stocks that could be in the midst of a potential short covering rally. More details about the methodology are listed below and more information on short interest is here.

Companies included in today's scan are: Palm Inc (PALM), ORBCOMM Inc. (ORBC), Great Atlantic & Pacific Tea (GAP), Sears Holdings Corp (SHLD), Whole Foods Market (WFMI), Conn's (CONN), EnerNOC, Inc. (ENOC), ArthroCare Corp (ARTC), DryShips Inc. (DRYS), Mediacom Communications (MCCC), Great Wolf Resorts, Inc. (WOLF), Liz Claiborne (LIZ), Hovnanian Enterprises (HOV), Encore Capital Group Inc (ECPG), ASSURED GUARANTY (AGO), Barnes & Noble (BKS), MBIA Inc (MBI), Urban Outfitters Inc (URBN), Yingli Green Energy Hold Co Ltd (YGE), Genco Shipping & Trading Limited (GNK), Furniture Brands International (FBN), Cascade Bancorp (CACB), Buckle (BKE), Palm Harbor Homes (PHHM), Energy Conversion Devices, Inc (ENER).

Methodology - the query scans my database of companies which has some basic filters to eliminate penny stocks and those that don't trade frequently. The table above is a filtered list of stocks that have at least 10 percent of their float sold short and showed a gain in the previous trading day. This can be a useful tool for finding situations where stocks with heavy short interest have begun to move.