This morning, my colleague Mark Fightmaster reported that online auctioneer eBay (EBAY: sentiment, chart, options) was downgraded from "hold" to "buy" at Argus. As today is the biggest shopping day of the year, and yes, I am at work, I wondered how some of the other online retailers were doing, considering the current economic situation.

At last look, EBAY shares had fallen 3.5%, Amazon.com (AMZN: sentiment, chart, options) was trading with a deficit of almost 3.5%, Blue Nile Inc. (NILE: sentiment, chart, options) had lost 3.39%, and Overstock.com (OSTK: sentiment, chart, options) had added more than 14%. Now, I can understand how AMZN and NILE would drop along with EBAY, but I definitely did a double-take when I saw OSTK's impressive rally.

Digging deeper, I found that today's rally for OSTK could be attributed to some profit-taking. After hitting a 6-year low last Friday, shares of the online retailer rallied 43% to Wednesday's close - which could have scared the short sellers. These bears have sold short more than 2.33 million shares, accounting for more than 15% of the company's float. If these pessimistic bettors were spooked, we could be witnessing a short-covering rally.