Stocks heavily shorted by institutions tend to underperform — the shorts are usually right on average.
Asquith-Pathak-Ritter 2005: short interest above 5% of float predicts negative future returns. But there's a flip side — extreme crowded shorts can squeeze higher. We use short-interest-to-float ratio + days-to-cover. Score is INVERTED: low short interest = high score (bullish), high short interest = low score (bearish). The "SHORT_SQUEEZE_SETUP" pattern flags potential squeezes.