Stocks are bouncing off their lows after touching bear market levels two weeks ago, with some of the hardest hit names leading the upswing. Some of these shares could have further to run for a trade because they still have hefty hedge fund bets against them and they are still in deeply oversold territory. CNBC PRO looked at the S & P 500 stocks that have made the biggest bounce from recent lows. We then looked for stocks that have a sizable short interest position as a percentage of their shares available for trading. In other words, stocks that hedge funds will be forced to buy back to cut their losses if the shares keep rallying. And then we looked for stocks still trading at least 30% below their average price of the last 200 days, meaning the shares are still oversold. To boot, these stocks also have more upside according to the consensus 12-month price target of Wall Street analysts. Here’s the list that came back using FactSet data. Source: FactSet A look at the names that made the list shows travel stocks and retailers that stand to benefit if inflation eases and the economy skirts a recession. To be sure, many investors and traders expect this is just a bear market bounce that will fail eventually. “The latest rally looks more like a bear market rally, which could carry another 5% in our view,” wrote Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, in a note Friday. If Wilson is right and the market takes another turn for the worse, these stocks could lead the way down. But with another possible 5% to go for the overall market, these names could continue to pop for now. —With reporting by Michael Bloom
