If Short interest ratio reaches extreme high levels,it represents an oversold market,hence buy signal.
some one pls elaborate this to me.
abhishekn37Intermediate
Technical analysis
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Short interest ratio means the no of shares that have been sold short/Average trading volume.
If the short interest is high, it means the no. of shares that people are short on are too much and now it is quite likely that people who were short on the shares will cover the shorts i.e they will buy the security,this represents oversold market. This buying will create demand in the market which is a Bullish indicator.