2 Tech Stocks Ripe for a Short Squeeze

Outside of a recent pullback in the wake of Donald Trump's surprising presidential win, tech stocks have put in a solid performance in 2016 -- as evidenced by the price action in the Technology Select Sector SPDR ETF (XLK). What's more, the tech-heavy Nasdaq Composite (COMP) is just a chip-shot away from the record high it hit on Tuesday. Drilling down, computer hardware maker Logitech International SA (USA) (NASDAQ:LOGI) and navigation expert Garmin Ltd. (NASDAQ:GRMN) are two tech stocks that fall under our "Electronics" umbrella that are trading well above their 80-day moving averages, yet are surrounded by skepticism. In other words, these low expectations could help boost LOGI and GRMN even higher up the charts.

LOGI, for instance, is up almost 62% year-to-date, after an Oct. 26 earnings-induced bull gap sent the shares barreling to an eight-year high of $25.87. Since then, the shares have successfully tested support atop the $23.60 level, home to their early October highs. Additionally, LOGI stock recently took a firm bounce off its rising 50-day moving average -- currently located at $23.98 -- and was last seen trading at $24.39.

The $24 level may be reinforced as a near-term floor, too, considering peak put open interest for LOGI is located at the January 2017 24-strike put. Plus, the shares could encounter fresh tailwinds, should short sellers continue to throw in the towel. Although short interest on LOGI plunged 23% in the two most recent reporting periods, it would still take 22 sessions -- at Logitech International SA's average pace of trading -- to cover these shorted shares. Simply stated, there's ample amount of sideline cash available to help fuel LOGI's fire.

GRMN, meanwhile, is boasting a 35.4% lead in 2016, with the stock's 120-day moving average serving as a springboard since a mid-February bull gap sent the shares surging north of the trendline. While a bounce off this supportive moving average eventually sent the security to an annual peak of $56.19 in early August, a more recent pair of successful tests have helped keep GRMN's longer-term uptrend intact.

Nevertheless, short sellers have been upping the bearish ante -- with short interest up 9.4% in the two most recent reporting periods. A healthy 12.2% of GRMN's float is now sold short, representing three weeks' worth of pent-up buying demand. Plus, all nine covering analysts maintain a "hold" or "sell" recommendation. Should shares of Garmin Ltd. (NASDAQ:GRMN) continue this positive price action, a short-squeeze situation and/or a round of upgrades could help the security extend this upward trajectory.

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