Short Interest Theory

The theory that a large short interest is the predecessor of a rise in the price of a stock.

Investopedia Says:
The reasoning behind this is that the short positions must eventually be covered, which means that there will be more purchasers of the stock who in turn drive the price up.

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Find out how this figure can be a real eye-opener on market sentiment of a given stock. Short Interest: What It Tells Us
Have you ever correctly predicted a stock's decline or wondered how to be profitable in a bear market? Find out how and the risks involved. Short Selling Tutorial

Theory that a large Short Interest in a stock presages a rise in the market price. It is based on the reasoning that even though short selling reflects a belief that prices will decline, the fact that short positions must eventually be covered is a source of upward price pressure. It is also called the Cushion Theory, since short sales can be viewed as a cushion of imminent buy orders. See also Members Short-Sale Ratio; Odd-Lot Short-Sale Ratio; Selling Short; Specialist's Short-Sale Ratio.