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Sears Holdings Corp.  (SHLD) opened today's session with a huge upside gap. This news-inspired ramp lifted shares nearly 20% higher with the help of a big jump in volume. As we enter the final hour of the day, Sears has given back half of the early gains as aggressive bears have taken advantage of this morning's surge. Considering an already sky-high short interest ratio, and multiple layers of support now in place, more upside may be ahead before a new down leg takes hold.

Sears began a steady rebound after bottoming in late June. The stock appeared headed for new 52-week lows earlier in the month before regaining its footing near $6.50. Heading into this week, the stock had put in a higher monthly low and was beginning to leave behind layers of support. This set up coupled with a short interest ratio of over 10 has set the stage for a continued rebound. For the bears, higher sell levels may develop as the month continues.

Sears now has solid support in place between $9.70 and $8.50. This key zone includes the stock's 200-day moving average as well as the June high. If shares continue to hold above this area in the near term, more upside is likely. A much clearer picture will unfold early next week after the dust settles.

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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.