2. What is a high percentage of short interest in a stock? (I've seen 3% for an average performing stock and >10% for some strong momentum stocks) If the stock is in a nice uptrend and has large short interest, this is good for a buy right? If it is in a downtrend and has large short interest, its good to short, generally?
Is there anywhere i can get a chart of the short interest to see it increasing/decreasing?
Short sellers have to eventually buy back the shares they shorted. As a result, any heavily shorted stock - whether in an uptrend or a downtrend - will be prone to sudden upsurges in price if a relatively bullish event causes shorts to start covering their positions (a so-called short squeeze). That said, I'd much prefer to be long an uptrending stock with high short interest than on a downtrending one. Some people bottom-fish on the basis of a potential short squeeze but that's high-risk stuff.
Don't have stats on the average short interest for stocks but anything above 10% is certainly very high. For large cap stocks with a large float, the short interest is likely to be minor.
I'm not aware of any charts that will show the changing ratios. The data is reported once a month, some sites will also give the prior month's results.
Below link contains some further thoughts on the subject.
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