The short interest in Ford (NYSE: F), rose 11.3 million shares to 283.1 million. The numbers compare shares sold short on April 30 in contrast to the number on April 15. Ford is now the most shorted company listed on the NYSE.

Ford has made a big deal about its turnaround. Some investors are buying the story. Ford's shares are up 20% this year.

But short sellers have a case, and it's a powerful one. Ford's US sales are still down by double digits most months. Sales of its most profitable cars and trucks, including its flagship F-150 pick-up, are dropping sharply, probably because of the rising cost of gas.

Ford's case is that it can continue to cut costs in the US and that its international sales are good. It is an argument that does not hold water. Ford has about 15% of the domestic market. How far can that fall? US sales need to support the company's factory and management costs on top of product development and design.

Ford can't count on all of those dollars coming from overseas.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.