BUZZ-Rolls Royce: traders look to lock in profits after 10 pct squeeze

** Rolls Royce (LSE: RR.L - news) set to run into resistance after a 10 pct rally in two days, according to three London-based traders

** US activist investor ValueAct disclosed 5.4 pct stake in co, leading to hopes of a turnaround at the beleaguered engineer

** However, co protected by UK government's "golden share" preventing a hostile takeover

** RR close to closing July 6 gap after warning on profits, suggesting bounce may be short-lived. Chart: http://link.reuters.com/qar35w

** Stock up 18.3 pct in last five trading days, poised for best 2-day run for stock since Oct (HKSE: 3366-OL.HK - news) 2011

** Traders cite short squeeze as exacerbating rally

** Utilisation of shares available to borrow has more than doubled in the last month from 2.5 pct to 6 pct, according to Markit (NasdaqGS: MRKT - news) data

** Fundamental picture still poor: 5 "buy", 10 "hold", 11 "sell" on the street, mean TP 782p now below 829p share price after rally

** Starmine SmartEstimate suggests intrinsic value of shares 735p, well below mean estimate (RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)