I've always been interested in how 'shorting' works, as I've never done it before. Just one thing I've noticed in the years of watching the market that has interested me, when you close a short, does that mean that you are pushing the price of said stock up, because you are technically 'buying' it back?
Example, I noticed with NCM shares on Friday, they opened down some 5% ($1.60), then, in the last 50 minutes or so, the price rose over $1.30 from approx $30.50 to close at $31.84, all on increasingly high volume and in the face of a dropping gold price. But this made me think, on the last day of the month, was this people closing their short positions in the last hour of trade, and hence pushing the price of NCM up by buying their stock back after shorting it? Also noted the very high buying volume across the market for the day. Refer to the attached chart below.
I also noticed on the E*Trade website that NCM was in the top 5 "most shorted stocks" list on 22 May, then I checked again just now, and it's not there anymore.
Or am I completely wrong? Perhaps might explain a lot of the movements in share prices of companies like BHP, RIO etc which all finished sharply lower in the final minutes of trading, possibly a sign of people beginning to short these stocks? Would be good to know for sure as I would find this useful to see what other people are doing on the market.