In the past week shares have rallied 18% on what looks like a classic short covering rally as too many people decided Teavana shares were headed south.
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The action over the past few weeks tells you that the market is going significantly lower, but the wild card remains policy action from Europe and the Fed that could trigger a massive short covering rally.
Should the stock continue to climb higher, it could end up reaping the benefits of a short-covering rally.
An unwinding of these bearish bets could supply the stock with ample fuel for a significant short-covering rally.
This would help dispel the view that Tuesday was just a short-covering rally.
The U.S. dollar index is under more profit-taking pressure Thursday morning, as the Euro currency is seeing a short-covering rally.
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If it clicks with this notoriously tough to impress crowd, sure, a short-covering rally could push the stock price higher.
The data at the end of the week is likely to fuel either a sharp short-covering rally or more selling.
However, HSBC and TD Securities analysts say this is creating the potential for a short-covering rally should a catalyst emerge to support prices.
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Heavy short interest, says Johnson, indicates that KFT is ripe for a potential short-covering rally should the share price continue to move higher.
If the bears are caught pressing their bets too hard into this quarter, then we could easily see a tradable short-covering rally for shares of Tibco Software.
Should EXPE extend its quest for record highs, a flood of upbeat analyst attention or a short-covering rally could push the shares even further into the black.
News and downward pressure from Europe has driven Apple ( AAPL) and the major US stock indices sharply lower, but a potential short-covering rally could present select new buying opportunities.
Importantly, the fact gold started to rally strongly from its recent selling pressure suggests the rally is more than just short covering.
Market watchers said the rally was likely a combination of short covering and a little bargain hunting.
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Afshin Nabavi, head of trading at MKS Finance, said the rally is gaining extra strength from short covering.
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Otherwise, a couple of major banks reported that there have been outflows from exchange-traded products so far this month, leading one to suggest that much of the buying in the current rally may have been in the form of short covering.
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For a change, it was encouraging news from the Eurozone that helped spur the rally, but there was also likely some serious short covering.
On the first oversold rally in the stock market, the materials and energy sectors may see more short covering, but once the market starts a sustainable new uptrend, groups like the restaurant stocks are likely to do the best.
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