Shares of Apple (NASDAQ:AAPL) trade at $108.62 as of a recent check, well off their 52-week (and all-time) high of $134.54. Fears that the company's iPhone business, which constitutes the majority of its revenue and an even larger majority of its operating profits, will actually decline in the coming fiscal year after many years of consistent growth are likely driving this decline.

Of course, when a stock declines, it means that there are more sellers than buyers. Something that I like to keep an eye on, though, are changes in the short interest -- or the number of shares of a stock that were sold short as of the short interest reporting date -- in a stock, particularly following a fairly steep decline.

If short interest is on the rise, then this could be an indication that investors and traders expect a deterioration in the stock price, often as a result of a deterioration in the business' fundamentals.

Let's take a look at the trend in the short interest in Apple stock.

A big surge in short interest
In the image below, you can see the short interest in Apple stock at various points throughout the year (the number is updated every 15 days or so):

Data source: NASDAQ.

What's interesting is that for most of the year -- essentially leading up to the September iPhone launch -- short interest ranged from about 53 million shares to around 78 million shares.

However, following Apple's Sept. 9 event (at which it launched the new iPhones), short interest began to move upwards. After the company's Oct. 27 earnings report, short interest started coming down again -- likely due to the fact that Apple management said that iPhone shipments would actually grow during its fiscal first quarter.

On Nov. 10, analysts with Credit Suisse came out with a note claiming that Apple had cut its iPhone supply chain orders by 10% as a result of weak demand for the iPhone 6s family of products, driving a bit of a decline in the share price.

This bit of news didn't really manifest itself in an increased short interest by the Nov. 13 settlement date, but by the Nov. 30 settlement date, short interest had grown by more than 30 million shares.

I suspect that in light of the slew of recent downward revisions in iPhone numbers from many, even seemingly die-hard, bullish analysts, we'll see another fairly large increase in short interest once the numbers are out.

Some context for these numbers
Typically, when the short interest in a stock represents a very high percentage of the total number of shares outstanding, this is a red flag. However, in Apple's case, even though over 108 million shares were sold short as of the Nov. 30 settlement date, Apple's total number of shares outstanding is 5.58 billion.

This means that only about 2% of the total number of Apple shares outstanding are sold short.

Although the fairly large change in the short interest relative to the total short interest is noteworthy, even the current elevated short interest doesn't suggest extreme pessimism around the future of Apple or its stock.

I plan to continue to keep an eye on the trend in the short interest over time and will report back if anything interesting shows up.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.