While Citigroup (NYSE:C) has been enjoying an extremely strong March, short-sellers have been increasing their bets against the giant financial institution, as there isn't anything in the fundamentals which has warranted the increase in Citigroup stock price other than the herd mentality, which has been working great for the company for now.

Citigroup has been the most heavily traded and heavily shorted stock on Wall Street this month, and that hasn't shown signs of abating any time soon.

It seems as long as the government holds a stake in the company, most feel it won't be able to keep any type of sustainable rally going, even with the type of March it has had so far.

The government ownership in the company has been thought to be the reason for the heavy shorting, but I think it includes that, but also includes a lack of improvement in fundamentals. There is no way Citigroup will keep on its upward trajectory, and shorts know that and are looking to capitalize on that reality.

Probably the only thing that could derail their cashing in is if the government gave a surprise announcement that it was about to sell its shares in Citigroup. That would give it a big push up which would possibly hold for a little while.

Once that was over though, it would go back to investors searching out the fundamentals, and at that time we'll be back to looking at the real health of the company and not whether or not the government is going to leave its stake in them.

Shorts are betting the fundamentals aren't going to change any time soon, as well as the government holding the shares in the company at this time. That combination lends itself to Citigroup dropping significantly sometime in the near future, the reason shorts are growing in number.