CNS Pharmaceuticals (CNSP) is at risk of experiencing a short squeeze, as indicated by the following analysis:
- High Short Interest: CNSP has a short interest of 53.52%, with 1.1 days to cover1. This indicates a significant portion of the float is sold short, leaving the stock vulnerable to a short squeeze if the price rises.
- Low Average Daily Trading Volume: With an average daily trading volume of 182.30K, the low volume could mean that a relatively small increase in buying pressure could force short sellers to cover their positions1.
- Recent Short Interest Increase: The short interest has increased by 218.93% from the previous month, suggesting a growing bearish sentiment or hedging activity among investors1.
- Company Background and Potential: CNSP is a clinical-stage biopharmaceutical company with a lead drug candidate, Berubicin, which is in a Phase 2 clinical trial. The company's focus on developing treatments for brain and CNS cancers could be of interest to investors, and positive developments in the trial could lead to a short squeeze if the stock price rises1.
- Market Sentiment and Short Squeeze Score: The Short Squeeze Score is a sophisticated quantitative model that identifies companies at risk of a short squeeze. CNSP's high short interest, low float, and other metrics contribute to a high risk score, indicating a potential for a short squeeze2.
In conclusion, CNSP's high short interest, low average daily trading volume, and recent increase in short interest all point to a situation where a short squeeze could occur if the stock price rises. The company's potential for positive developments in its clinical trials and the high risk score from the Short Squeeze Score further support the possibility of a short squeeze. Investors should monitor CNSP closely for any signs of a short squeeze, such as a sudden increase in trading volume and price.