High short interests can be your friend
I've read many different posts on blogs and message boards venting frustration that "The Shorts" are constantly pushing the share price of their stocks down.
When looking for an entry point, I generally check the short interest compared to the historical average, and I consider a high short interest to be a favorable indicator.
If you are investing in quality stocks, and you've checked and double-checked the fundamentals and the news to verify that there isn't an on-coming train or truck about to hit your stock, a high short interest can actually be a very good thing. Just like longs, shorts tend to over-play their hand and more short interest will appear as a stock pushes downward well below fair market value. It acts like a coiled spring that will help the stock push upward fast and furious when good news or solid earnings eventually present themselves. It is also an indicator that the stock has reached its near-term bottom and a quality buying opportunity has presented itself.
I've noticed that there is a common fear among longs that short investors are somehow more informed than longs, and that they must "know something". Through my investing experience, I've found that shorts are no more informed than longs, and tend to make the same mistakes in reverse that most long stock buyers do. There are informed investors on both sides of the long/short fence.
If you've done your homework, it can be advantageous to look for a quality stock with a high short interest.