We all know that the feature phone market is dying and the mobile app market is hot. And that is what makes short-term investment decisions very tricky indeed. When everyone is widely aware of certain trends, everyone on Wall Street tends to scramble to the same side of the boat simultaneously. But sometimes, the boat tips.

Nokia’s (NOK) 2Q12 report had two major surprises. The company managed to sell 4 million Lumia phones, about 1 million above consensus. But perhaps even more importantly, Nokia showed +4% sequential feature phone volume increase when Wall Street expected -4% volume decline. The feature phone market is still dying — but the process may be a bit slower than anticipated and Nokia just might be grabbing share in a shrinking market.

The combination of beating both smartphone and feature phone expectations did not light a rocket under Nokia share price immediately after the July 19th earnings report. But as days went by, more and more investors shorting Nokia began concluding that the company may not face the short-term cash crunch the bears had been salivating about. Shorts started covering their bets, which means they had to buy Nokia shares to exit their positions. The wave of buying built into a tsunami. Then, like clockwork, rumors (probably entirely fabricated) about possible M&A action began popping up again.

In less than two weeks, Nokia’s share price swung up by more than 45% from its mid-July lows.

Zynga (ZNGA) has executed a neat mirror maneuver. As everyone knows, social and mobile gaming are hot growth industries. Zynga made a bold move by coughing up more than $200 million for OMGPOP, the developer of the hot “Draw Something” game — back in March. The new entity seemed to be on the verge of grasping the whole non-console gaming zeitgeist and running with it. Everyone knew this, and analysts like Wedbush’s Michael Pachter slapped giddy $17 price targets on Zynga’s stock as they jumped on the bandwagon.

Two problems. First, Zynga has always been notorious about cloning the same exact game mechanics for all of its Facebook resource management products, and that monotony finally started catching up with the company in in the second quarter. Second, the upgrades for “Draw Something” were spectacularly ill-advised.

Mobile games are not neat packages — they are living entities requiring careful upgrade pathway design and quality improvements. Perhaps as a result of the Zynga acquisition, “Draw Something” was not tended well. In May, it started slipping badly on the iPhone paid app chart, dropping out of top 20 by the end of the month. By end of June, the hottest mobile game of March was out of top 50. The diamond in Zynga’s crown had cracked in less than three months.

By August 1st, Zynga’s share price had plummeted by roughly 50% from its July highs. Instead of soaring to $17, it slumped below $3.

People shorting Nokia and going long Zynga for the past month have gotten their clocks cleaned. The feature phone market is still dying, Lumia is still facing a mountain to climb and mobile gaming is growing at a heady pace. But in the short term, following the most obvious trends evident in USA Today headlines can often be a tough row to hoe.