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Observations on Short Covering in Share Market

Short covering usually happens fast — especially when the market moves unexpectedly against short sellers. Prices rise quickly as shorts close positions to cut losses. But a key point many traders miss is that short covering alone doesn’t shift sentiment to bullish. After the initial spike, the price can stabilize or drop again if fresh buying doesn’t follow. So short covering is more like a pressure release, not a trend reversal by itself. To avoid getting trapped, I wait to see whether new long positions build afterward (price up + rising open interest). Anyone else track post-cover build-up phases before entering trades?


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