The recent batch of U.S. economic data points have been soft (blame it on the weather, so the refrain goes), prompting some mixed housing numbers.

In January, housing starts fell 16% while building permits dropped 5.4%. On the other hand, backlogs remain solid and on Wednesday, the CoreLogic home price report said prices rose 12% year-over-year in January.

Over the past month, the $1.8 billion iShares U.S. Home Construction ETF (NYSEArca: ITB) is up 9.5% and although it is trading slightly lower Wednesday, ITB is within pennies of its 52-week high. The ETF could also be the beneficiary of a short-covering rally. [Improving Sales Data Lifts Homebuilder ETFs]

As the tweet below highlights, traders have established large short positions in some of ITB’s largest holdings. The 5% short interest in Toll Brothers (NYSE: TOL), ITB’s fourth-largest holding with a  weight of 8.8%, is not excessively high, but some of the positions indicate these stocks (and ITB) could soar if shorts are forced to cover.

KB Home (NYSE: KBH), the most shorted stock on the list, is ITB’s tenth-largest holding. Lennar (NYSE: LEN) and DR Horton (NYSE: DHI) are the ETF’s largest and third-largest holdings, respectively. Hovanian (NYSE: HOV) is the only stock on the above list that is not a top-10 holding in ITB, but overall the names in that tweet combine for over a third of the ETF’s weight.

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