Here is an example of what to look for in "bottom picking" and trying to catch a rally caused by the shorts covering.
Oil and energy is firming up.
Cliffs Natural Resources is in the coal bidness.
After a long decline with the opportunity for many short positions to be built up it may be time to reverse. (For awhile)
CLF broke to a new low not long ago, but now the price is bumping up against that ceiling. If price goes higher from here it may be a signal to shorts watching to cover their positions (rightly so, as I expect energy to continually grow stronger from here as the WORLD regains mo).
Buy the breakout, add on strength for a 20-30% gain.