| FEB 1989
Short Interest by Arthur A. Merrill
Short Interest by Arthur A. Merrill Short interest – the sale of borrowed stock – is one of the most useful tools of the technician. Short sales are made by pessimists, who expect prices to fall. If prices fall, the short seller can buy shares at a lower price and return the borrowed stock. Because short sales are made by pessimists, it would seem that a high short interest, displaying a large number of bearish investors, would be a bearish indicator. No way! A high short interest means that past sales have been made, future purchases must be made. High short interest, therefore, represents high potential demand for stocks and has been found to be a bullish sign. However, when you consider the ratio of short sales made by professionals to the short sales made by the ""public,"" a high figure is bearish. When the professionals are pessimistic and the public is optimistic, beware!
by Arthur A. Merrill, C.M.T.
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.