Short interest is a powerful market force that can not only cap gains but drive share prices lower, but not always. Sometimes, even the short sellers get things wrong. Companies that look troubled really aren’t, and they set the underlying stock up for robust rallies.
The higher a stock’s price gets above the point of short sale, the more a short seller loses and the greater the impetus to close the position. If the short interest is sufficiently high, as it is with the technology stocks on this list, the scramble to buy shares and close positions can result in a supply deficiency that causes share prices to rocket higher.
