Clovis Oncology Stock Boosted By Promising Regulatory Update

A short squeeze could push CLVS even higher

Managing Editor
Feb 22, 2018 at 10:25 AM
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Clovis Oncology Inc (NASDAQ:CLVS) stock is up 7.4% to trade at $59 this morning, after the company received a positive trend vote from a European Union (EU) committee for its ovarian cancer drug marketing application. In response, RBC upgraded CLVS stock to "outperform" from "sector perform," while cutting its price target to $72 from $80. The analyst in coverage is calling for a positive outcome when the official vote is taken next month, and predicts a strong launch for the treatment in the U.S. during the second quarter.

Clovis stock is on track for its best day in months, but is struggling to overcome the 50-day moving average that's contained the past two breakout attempts. The equity is also trading right near its year-over-year breakeven level as it tries to recover the losses it's suffered since peaking just below the century level back in July.

A short-squeeze that could provide tailwinds for the security. Short interest increased by 6% during the last reporting periods, and accounts for nearly 17% of CLVS's total available float. This represents nearly one week of pent-up buying demand.

Whether you're expecting a pullback or extended upside, it's a good time to speculate on CLVS with short-term options. That is, the stock has a Schaeffer's Volatility Index (SVI) of 58%, which sits just 12 percentage points from a 52-week low, hinting at lower-than-usual volatility expectations for near-term contracts. This is especially surprising since the company is slated to report earnings after the close on Monday.

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