Signet Jewelers Sends Shorts Scrambling For Cover

Signet Jewelers Limited SIG shares are trading higher by $4.60 (7.2 percent) at $69.00 in Thursday's session.

The Street is reacting positively to a mixed Q4 report that included an adjusted EPS beat of $0.02 with a shortfall in revenues. The company raised it quarterly dividend from $0.26 to $0.31 per share.

Signet's stock has been in prolonged decline since it peaked in October 2015 at $152.27. However, it finally found some serious buying interest in the $62.10-$63.00 area over its last five trading sessions.

After a lower open, it immediately bottomed at $62.75 and began to rally. The rebound off the low may have caught some shorts off guard, as the short interest stands at 16.35 percent of the float. When unable to cover into a falling market, they were forced to cover in a much more difficult rallying market.

So far, the short-covering rally has taken the issue to $69.81, but has fallen back to the $69.00 area. The current high coincides with its February 28 high of $69.75.