Top Technology Short-Squeeze Plays

Updated from 6:13 a.m. EST

The market's recent volatility has sent a lot of technology stocks significantly lower in the past month. That downward pressure creates the possibility of a bounce higher, especially with the stocks that have been heavily shorted.

When heavily shorted stocks are met with positive news, a short squeeze can take place. As the stock price drives higher, short-sellers are forced to cover their bearish positions. Short-squeeze potential is measured by the short ratio, which is the number of days it would take the short-sellers to cover their positions, based on the stock's recent daily trading volume.

Stockpickr has put together Top Technology Short Squeezes, a list of 10 potential short-squeeze plays in the sector.

Quality Systems(QSII Quote) has one of the highest short ratios among its technology stock peers, with a short ratio of 20. This health care information systems company is set to report fiscal third-quarter results after the market close. The stock offers a price-to-earnings (P/E) ratio of 25 and a yield of 3.3%.

Quality Systems is part of the portfolio of the Turner Emerging Growth Fund. The five-star Morningstar-rated fund also holds Deckers Outdoor(DECK Quote), which has a short ratio of 6.9, RTI International Metals(RTI Quote), with a 7.9 short ratio, and Oceaneering International(OII Quote), with a 1.4 short ratio.

Another highly shorted technology stock is Raven Industries(RAVN Quote). This manufacturer of electronic and engineering products has a short ratio of 12. The stock, which was downgraded last week to sell by Piper Jaffray, has a P/E of 21 and a yield of 1.5%.

Raven shows up in 15 Diversification Candidates, an interesting Stockpickr member portfolio from last year that lists stocks with low betas, low correlations to benchmarks and top-ranking performance. This portfolio also lists Exactech(EXAC Quote), with a short ratio of 0.3, Metal Management(MM Quote), with a 6.5 short ratio, and Chesapeake Energy(CHK Quote), with a short ratio of 7.

Dionex(DNEX Quote) is yet another tech stock with a high short ratio -- 13.2. This manufacturer of analytical instrumentation products just last week reported a fiscal second-quarter sales increase of 17% and earnings per share of 77 cents, vs. 68 cents for the same quarter last year. The stock has a P/E of 32.

Dionex is a stock owned by Richard Aster Jr., founder of Aster Investment Management. Aster also owns Willis Group(WSH Quote), with a short ratio of 1, Diebold(DBD Quote), with a 2.7 ratio, and BE Aerospace(BEAV Quote), with a 2.9 short ratio.

To see the entire more potential short-squeeze plays in the tech sector, check out the Top Technology Short Squeezes at Stockpickr.com.