Clover Health Gaps Up As Traders Try To See A Short Squeeze

Clover Health Investments Corp. CLOV gapped up Thursday morning after retail traders tried to squeeze the shorts out of the stock.

Clover Health is a Reddit stock, and one of the main interests of retail traders is the stock has a high short float percentage. Clover Health has a short float percentage of 36%.

Clover Health closed up 2.2% at $8.94.

Clover Health Daily Chart Analysis:

• Shares are trading in a sideways channel and gapped up near resistance Thursday morning.
• The stock is trading above the 50-day moving average (green), but below the 200-day moving average (blue), indicating the stock is most likely facing a period of consolidation.
• The 50-day moving average may act as support while the 200-day moving average may be a place of resistance.

Key Levels To Watch:

• Shares gapped up today near resistance, but have since fallen further away from the resistance level.
• Shares have previously been able to find support near the $7 level. This is an area where the stock has struggled to cross below in the past.
• The $10 area may hold as a possible area of resistance as this is somewhere the stock previously held as support but has not been able to hold above this level since.

What’s Next?

Bullish technical traders would like to see the stock build higher lows and break above the $10 resistance. Consolidation after resistance allows the stock to see higher moves if buyers come back following the consolidation.

Bearish technical traders would like to see the stock fall below the potential $7 support. A break below the bottom of the channel may let the stock see a stronger dropoff.