6 Short Cover Rallies to Avoid at All Costs

These 6 recent comebacks are just beacons of false hope

Nov 29, 2012, 2:48 pm EDT | By Johnson Research Group

Research In Motion

Click to Enlarge Research In Motion (NASDAQ:RIMM) feels like a broken record, and the shorts have been making a killing on the song.

There have been a number of news stories on RIMM lately with the approaching release of BB10. Unfortunately, this is a trend that we’ve seen before.

Shorts were loaded up ahead of the recent media buzz, as the short interest ratio for RIMM moved back above 7 earlier this month. Shares are more than 40% higher from their prices a few weeks ago, and I’m fairly sure short covering has had a lot to do with the move.

If you’ve been holding the stock, the recent strength might be your chance to exit on some strength. If you don’t own it, hold off on buying this short squeeze, then re-read the last sentence of our Nokia commentary.