Short Squeeze today??

Question to experts from a newbie....

Did we have a short squeeze today?



Check out the RCF chart for example. Someone brought 1million shares and shot the price up by 2 rs immediately. Folks who had shorted the RCF shares immediately rushed in to cover their positions further spiraling up the price.

Lokesh,

RCF was witnessing significant buying interest. Shorting in these scenarios is anyway fatal.

For those who short the stock thinking it would go down have certainly covered their position.

Always stay away from shorting stocks that have average 3% + average moves (that is, when stock moves up, it usually does so by 3% + moves) in previous 10 days.

won`t it go down in similar fashion?

That depends Aditya. If there is some real buying interest creeping in, then it won't come down (Fertilizers and chemicals across the board are witnessing significant buying interest). It might only retrace.

In these scenarios it is better to track the entire sector and industry. If the buying is across the board, then we can take the risk of riding the trend. It's better to be an investor in these kind of stocks rather than a trader.

Tc.