A short build-up is a situation in the stock market where more investors are expecting a fall in the price of an underlying asset, and hence they have entered into short positions. This can occur due to various reasons such as bad news about the company, negative global factors, or the stock being overbought. Short build-up is considered a good time for traders who are willing to go short or exit their positions. In contrast, a long build-up is the occurrence of a long (buying) trend in the share market. It implies that more investors are taking long positions and expecting prices to rise. Long build-up is considered a positive signal for traders.

To identify a short build-up, traders can look at the price and open interest of the underlying asset. If the price goes down and open interest goes up, it is a short build-up. On the other hand, to identify a long build-up, traders can look at the price and open interest of the underlying asset. If the price and open interest go up, it is a long build-up. Short covering refers to buying back the shorted securities, which means the price rises and the open interest drops. Short covering causes good movement in stock prices and is often used by traders for good use.