Short Position Climbed with Price—Squeeze Occurred in May, May Be Building Again.

Sainsbury (SBRY LN) is a UK-based grocery store and delivery chain with a market cap of approximately $10 billion USD. It currently holds the largest short interest in the FTSE at 13% of float, up from 9% at the beginning of the year.

The stock price is up 22% YTD. Drivers of the stock’s rise include strong financial performance, expanding market share, a rebound in investor sentiment, and broader UK equity market strength.

The graph indicates a correlation between the stock price and short interest, suggesting a reversal or value-driven pattern—short selling increases as the stock moves higher.

The elevated short interest % of float results in a high Crowded Shorts score of 70. The Short Squeeze Score oscillates around the Crowded Score, reflecting changes in short seller profitability as the stock price fluctuates.

The stock remains easy to borrow, with minimal borrow costs.

Throughout May, with a Short Squeeze Score above 70, the stock rallied while short interest declined—signaling a prolonged short squeeze event. Short interest dropped by 10 percent, bringing the Squeeze Score back below 70.

In parallel with increasing short-selling sentiment, analyst sentiment has turned bearish, with buy-side ratings falling to half of their prior level and the stock trading at the target price.

Several large hedge funds have disclosed significant short holdings. Meanwhile, short sellers cite risks such as intensifying price wars, concerns over forward earnings estimates, and broader macro headwinds.

The graph illustrates a pattern where short interest rises are correlated to price rises.

With this reversal strategy, if the stock continues to rise, we can expect increased short positioning, driving both the Crowded and Squeeze Scores higher—from a positioning and return perspective.

Conversely, a price decline would likely reduce short interest levels, along with corresponding Crowded and Squeeze Scores.

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