MER Telemanagement Solutions Ltd. (NASDAQ: MTSL) is flying in the market this morning, but the move is baffling some investors. With no press releases or SEC filings, many are wondering why it is that this stock is headed up. Nonetheless, there is a reason for the gains. Today, we’ll talk about
- Why MTSL is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why MTSL Is Headed For The Top
As mentioned above, MER Telemanagement Solutions is having a great day in the market today. However, the company hasn’t released any news. So, what’s the deal?
Well, it all has to do with technical information. First and foremost, when we talk about stocks with an incredibly low float, we’re essentially talking about stocks like MTSL. This float isn’t even big enough to be called small, it’s more like a nano-float. This is a big part of the gains. Ultimately, when a stock trades with a small float, it doesn’t take much to really move the needle.
Then, when we look at short interest, we find more to be excited about. At the moment, short interest on MTSL is pretty high. According to ShortSqueeze.com, it’s sitting at about 16.22% after an increase of about 2% as of late.
Ultimately, when heavily shorted stocks start to move upward, those who have short positions get nervous. As a result, they start to exit their positions. Short positions are simply borrowed long shares. When these positions are squeezed out, the shares go long and the stock heads up. This is what’s known as a short squeeze.
In my opinion, after looking at the float and short data, it’s pretty clear what’s happening here. A low float was the reason for the initial spike in value. From there, shorts started to shake in their boots and exit their positions, ultimately sending the stock higher. Another point to note here is that with a low float short squeeze, there’s no telling just how much this thing can run. So, the run may be far from over.
What We’re Seeing From The Stock
While MER Telemanagement Solutions hasn’t released any news today, it hasn’t had to. The bottom line is that this is a purely technical move that’s leading to a short squeeze. As the shorts get squeezed out, it’s getting more and more attention and heading further upward. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:14), MTSL is trading at $2.85 per share after a gain of $1.07 per share or 60.11% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on MTSL. In particular, we’re interested in following the story surrounding the short squeeze and just how high it sends the stock. Nonetheless, we’ll continue to keep a close eye on the news and bring it to you as it breaks!