Late last month, my colleague Andrea Kramer took a bullish stance toward Children's Place (PLCE: sentiment, chart, options) in her Back to School series. The company validated Andrea's bullish inclinations today, announcing that it lost 3 cents per share in the second quarter. How is this a validation of bullish feelings? The consensus estimate was for PLCE to lose 44 cents per share so, the shares have rocketed nearly 12% higher. The retailer noted that strong Internet sales, along with cost-cutting measures, helped push the results higher. The company did note that it expects further pressure on consumer spending thanks to the weak U.S. economy.

On a year-to-date basis, PLCE has advanced 42% - but the company still faces heavy skepticism from analysts. According to Zacks, 5 of the 6 analysts tracking PLCE rate it a "hold" or worse. We could see this bearish bunch issue upgrades, which could lend further momentum to the stock. However, the largest upside potential comes from short sellers. Currently, 24% of PLCE's float is sold short. If today's earnings news forces this group to buy back its bearish bets, we could see the stock sustain its early push higher.