Investors looking for hidden corners of the market where shares might be set up for potential gains in the event the latest rally climbs even higher may want to look at picking up stocks that other traders are betting against. Short-sellers, or traders who think that a stock will decline instead of gain, sometimes need to sell out of their borrowed positions when they become too costly to maintain or to limit their losses. This short covering means that traders are buying back the stock, which can boost the price of the shares at least in the short-term. To be sure, the market has continued to be volatile, and traders often short stocks that they see as fundamentally flawed, meaning they aren't necessarily set to gain over time. In addition, the S & P 500 is about 15% above its June low and has been slowly grinding higher. Stocks that are heavily shorted and whose price reverse are set up to be winners if short sellers get squeezed. To identify names where the ground may be prepared for such a bounce, CNBC Pro screened S & P 1500 stocks with a market cap of $1 billion or more. The list was then narrowed by filtering for stocks that are at least 50% below their 52-week high, and which have at least 10% of their shares that are freely available to trade ("the float") sold short. The number one stock on the list is Trupanion , a pet insurance company that's nearly 53% below its recent high and with short interest that's 18.5% of its float. On the CNBC list, Apollo Medical Holdings , a health care management company, has fallen the most from its 52-week high. The stock is down more than 63% from its all-time high notched in November 2021. Two cruise lines, Carnival Corporation and Norwegian Cruise Line Holdings , are also on the list. These stocks have been whiplashed over the last two plus years throughout the Covid pandemic. Now, Carnival is down more than 60% and Norwegian has slumped nearly 52% from their recent highs. Both companies have short interest that's more than 10% of their float. A variety of retailers round out the list of short squeeze candidates, including American Eagle Outfitters, Gap and Under Armour. Consumer discretionary stocks Sleep Number, Yeti and Etsy also make the list. One notable omission that was prominent on previous lists of short-squeeze candidates is GameStop. The meme stock has rallied in recent weeks and is no longer more than 50% below its 52-week high. That price action may be driven in part to a short squeeze as the price of the stock increases. Similarly, a run up in the price of Bed Bath & Beyond , absent any fundamental shifts, is likely the cause of some short covering. The company's short interest float is more than 47%, according to FactSet.