Question

A high amount of short interest is typically considered as a ________ signal, and contrarians may consider it as a ________ signal.

1) Bullish, Bearish
2) Bearish, Bullish
3) Positive, Negative
4) Negative, Positive

Answer 1

A high amount of short interest is typically considered as a Bearish signal, and contrarians may consider it as a Bullish signal.

Step-by-step explanation:

A high amount of short interest is typically considered as a Bearish signal, and contrarians may consider it as a Bullish signal. In the stock market, short interest refers to the number of shares that have been sold short but have not yet been covered or closed out. When there is a high level of short interest, it suggests that investors are bearish on the stock, expecting its price to decline. However, contrarians may see this as a bullish signal because it indicates a potential buying opportunity if the stock's price begins to rise.