Ares (ARES) has seen a sharp increase in short interest ahead of earnings. Historically, this trend has predicted weaker stock performance. While stock model signals are slightly bearish, the alignment of rising short positions and implied volatility suggests that traders should be cautious heading into the event.

• Ares (ARES) reports Monday after the closing.

• The short model is bearish and stock model is slightly bearish.

• The short position is up significantly in recent days.

• The shorts tend to be correct.

• The stock is priced by the options to move 5% either way and usually moves 3%

Longer term the short interest is up.

With options pricing in more volatility than historical averages, and short interest climbing quickly, Ares may be vulnerable to downward pressure. Past patterns suggest shorts tend to be accurate in their direction. Investors should stay vigilant and watch the post-earnings reaction closely, especially if sentiment weakens further.

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