Tandem Diabetes Care May Be The Next November Short Squeeze

Tandem Diabetes Care Inc TNDM shares were higher by more than 33 percent in Friday’s session. After selling off by 70 percent in the past month. Friday’s trading action is likely being driven by a short squeeze.

Friday’s volatile trading comes without any significant company-specific news, another indication that much of the rally could be driven by short covering.

According to shortsqueeze.com, there are more than 1.9 million shares of Tandem Diabetes Care held short with 18.5 days to cover. Under Tandem’s current share structure, those numbers represent a 10.4 short percent of float.

November has ushered in a number of violent short squeezes, driven in part by the election of Donald Trump. The most notable squeeze involved DryShips Inc. DRYS, which was halted on Wednesday after gaining more than 2,000 percent in a matter of days.

Some traders believe the entire Russell 2000 index of small-cap stocks is being driven higher due to a post-election short squeeze. Zero Hedge recently pointed out that the index continues to trade up despite short interest near all-time highs.

Tandem Diabetes traders are hoping the stock continues on DryShips' path and goes on a multi-day run. The stock’s heavy short interest suggests that scenario is certainly possible.