(LED light stocks, Cree, Veeco story updated for latest Nasdaq short interest data)NEW YORK ( TheStreet) -- Stocks in the LED lighting sector showed signs of life on Tuesday, and it was a significant change for the sector, but it didn't last. Three prominent LED stocks -- Veeco Instruments ( VECO), Cree ( CREE) and Aixtron ( AIXG) -- outpaced the gains made the broader equity markets on Tuesday, but by Wednesday and thought of a sustained rally from the group was erased. In the case of Cree, trading volume was high on Tuesday, but it was right back down at its average volume on a losing Wednesday. The lack of trading volume in Veeco and Aixtron shares trading has been below average, and the fact that investors are swooping in to buy up beaten down shares of the LED stocks suggests that any short-term change in fortunes of the LED companies is not a signal of long-term bullishness. In fact, the latest short interest data from the Nasdaq details an increase in bearishness on the LED lighting stocks in recent weeks, with Cree bearishness being the most intensified. It's notable that for all three LED stocks, short interest is at its highest level in more than a year. The Nasdaq short interest data is two weeks trailing, so the short interest on Cree, Veeco and Aixtron released by the Nasdaq this week is as of Aug. 31. Cree short interest jumped from 11.5 million shares to more than 15 million shares in the two weeks ended Aug. 31. The 11.5 million short positions on Cree two weeks ago was the previous high for the past one year period, and so, the four million additional shorts added in the most recent two week Nasdaq period is notable. Veeco short interest increased by more than 2 million shares as of Aug. 31. The increase in short interest in Veeco shares has been steady, as had been the rise of the LED stocks until the recent crash. There was only short interest on 1.6 million Veeco shares in August 2009, and at the end of August 2010, short interest had climbed to just short of 13 million shares. Both Cree and Veeco short interest has increased considerably, even as average daily trading volume was significantly lower in both LED stocks in the most recent two week period. The same trend holds true for Germany's LED play Aixtron, which had half its average daily volume in the two-week period reported by Nasdaq ending Aug. 31, but saw short interest increase slightly to near 3.6 million shares -- the previous two-week period was already an annual high for short interest in Aixtron shares, and last August, there was only short interest of 715,000 shares.