One of the hottest meme stocks of 2022 is skyrocketing today. micro cap Clovis Oncology (NASDAQ:CLVS) has increased by 30% at the time of this writing. Although his gains seem to be shrinking, it’s hard to ignore this kind of push. The company-specific news today is that shareholders have rejected CLVS’ proposed stock split.
While this news will certainly push the stock higher, there is another catalyst that investors shouldn’t ignore. CLVS stock has been flagged as one of the top candidates for gamma compression and is getting a big buzz on social media.
Is CLVS Stock the next market squeeze?
Short-term analysis platform Fintel currently ranks CLVS stock as the most likely candidate for a gamma squeeze play. LikemartAsset states, gamma compression occurs “when the price of the underlying stock begins to rise very rapidly in a short period of time.”
This certainly applies to CLVS. The stock is up nearly 60% in the past five days and 265% in the past month. He jumped 9 places on the Fintel gamma squeeze board and posted a score of 99.19.
The social media traction that CLVS stocks are receiving, however, is likely due to Twitter influencer Will Meade. The short investor shared a screenshot this morning of Fintel’s top five rankings for short and gamma squeeze stocks. He then shared an image of the stocks with the morning highest trading volumewhose CLVS title placed fourth.
Since the publication of Meade’s tweets, social media has been buzzing as investors tout the gamma compression potential of CLVS stock and marvel at its big volume. An user asserted that he “will live [a] gamma squeeze anytime soon”, while another described it as “squeezing now.”
Some investors have made it clear that they expect Clovis break $3 per share very soon, and it looks set to do just that. They see CLVS stocks as the next big gamma squeeze, and they’re pushing hard for the kind of bullish plays that will get there. The impressive volume of trade is consistent with the phenomenon.
Next for Clovis
As with all meme stocks that skyrocket on social media, there’s a question investors need to ask themselves: how long can CLVS stocks continue to rise? There’s no way to tell for sure, especially when it’s potentially in the middle of gamma compression. But one thing that is easy to predict is that when this stock drops, it will fall hard.
We’ve seen the CLVS rise on treatment trials and takeover rumours. But until a true catalyst for growth is confirmed, there will remain a stock of memes that rises and falls with social media interest.
The crowd that put stoppage of play (NYSE:EMG) and AMC Entertainment (NYSE:CMA) on Wall Street’s radar is working hard to keep CLVS stock in the green. When they lose interest, as they inevitably will, it will come crashing back down to earth. But for now, investors should watch CLVS stock as this gamma compression runs its course.
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At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication guidelines.