Yesterday no one got a chance to cover the shorts and today’s gap up we will see further shorts to cover up their position. So we will see that good amount of rush for covering up the shorts today.

Here is a transcript of Research Analyst, Nimesh Shah’s comments on CNBC-TV18. Also watch the accompanying video.

There were lot of pending orders both in the cash and the futures market from yesterday’s trade which are likely to get continue in today’s trade. The initial feedback from most of the large brokerages is that none of the large FIIs (Foreign Institutional Investors) have changed their yesterday’s orders but the only difference is that yesterday there were no limit orders today most of them have turned into limit orders. It means that at a particular price those will get executed but still there is lot of buying in the system which needs to be absorbed. And the fact that we will see gap up opening if Singapore Nifty is anything to go by which means that there will be further shorts squeeze and that also need to be cover up.

Yesterday no one got a chance to cover the shorts and today’s gap up we will see further shorts to cover up their position. So you will see that good amount of rush for covering up the shorts, so that will happen in the first trade.

Someone needs to come and supply the stocks and the only players who can give up at this point in time are the insurance companies, the larger DIIs (Domestic Institutional Investor) basically the LICs of the world. And that looks like if there is an upper circuit. In later trade you will see floppy trade largely from LIC (Life Insurance Corporation) and they will be the one who look to supply and bring a bit of sanity to the stock prices. So that’s a general feedback from the market and most of the brokerage have come out with a note saying that after yesterday’s rally one should look to book profit in IT stocks.