Tototy -- while I accept some of what you say, the question is...

Tototy -- while I accept some of what you say, the question is whether shorters need to buy back shares on the ASX such that a "short rally" would occur. If the shorters don't close their position via an ASX transaction, it wont be reflected in the ASX price.

The fact of the matter is that shorters can close their position in any number of ways other than buying back shares on the ASX. If they are large enough, they could buy them from another institution (yes in a "dark pool"), they could buy a warrant, they could buy a CFD, they could even get a convertible note.