Generally speaking, the activity to which you refer is denominated as "Painting the tape."
Again, generally speaking, it has nothing to do with shorting. It usually has everything to do with somebody trying to do management a favor.
While agreeing with you that it probably has no material effect, it does have a psychological impact. Not being a shrink or a counsellor, I believe I am to understand that it may have something to do with the concept of "saving face." If the stock closed on an uptick, the subconscious will be less restive and investors may sleep better that night.
Professional and qualified opinions on this matter will be appreciated. Since even at eight or nine cents, it does cost a few bucks for a couple hundred shares plus commissions or transactions.
