The SEC exception that allowed naked short selling ends Monday. This may or may not cause short covering that can drive up the stock of heavily shorted companies such as the home builders. This would be what is called a sucker's rally, for once the short covering is over and any company that deserved to be shorted reaches an even higher basis, the shorts will be even more aggressive on the way down for the stock will be trading higher than its perceived fundamental value.
For more on the SEC rules, click here: http://sec.gov/rules/final/2007/34-56212.pdf
This would be what is called a sucker's rally, for once the short covering is over and any company that deserved to be shorted reaches an even higher basis, the shorts will be even more aggressive on the way down for the stock will be trading higher than its perceived fundamental value.
Posted by: homes for sale newport coast | July 20, 2011 at 05:21 PM