When it comes to stocks making big runs this morning, Roadrunner Transportation Systems Inc (NYSE: RRTS) leads the charge. Interestingly, there has been no news released either via press release or SEC filing. On the other hand, that doesn’t mean that the gains are happening for no reason at all. In fact, we believe that we’ve found the reason. Today, we’ll talk about:
- Why RRTS is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why RRTS Is Climbing
If you’re looking for the reason Roadrunner Transportation Systems is headed up, don’t look for press releases or SEC filings. You’re not going to find any. The details are all in the trading chart.
Start by taking a look at the RRTS stock chart over the past three months. What you’ll see is months of declines with small edges upward here and there. Through all of the negative movement, the stock found its way to a low float with very high short interest. Then, something important happened.
RRTS recently hit a mental barrier that investors and traders like to call support. After falling so hard for so long, something clicked among investors that are feeling like it can’t fall any further. This led to the first bit of gains that we’re seeing from the stock today.
Once the stock started to head up, the real reason for the gains started to jump in, leading to the drastic movement the stock is experiencing. With such high short interest, as the stock started to edge up, shorts started to check their bank accounts. They were losing money. As a result, shorts are starting to abandon ship in what is becoming a classic short squeeze.
What We’re Seeing From The Stock
Short squeezes are some of my favorite moves to follow. That’s because there really is no telling how much higher the stock will go. In this particular case, short interest was high even when we’re talking about high short interest, so the potential for gains in multiples may be there. Nonetheless, our partners at Trade Ideas were the first to alert us to the movement. Currently (10:07), RRTS is trading at $0.68 per share after climbing a quarter per share or 59.18% so 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 RRTS. In particular, we’re interested in seeing just how high this short squeeze pushes the stock. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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