A Look At Short Interest In Transenterix's Stock

Transenterix Inc TRXC stock has exploded higher on incredible volume over the past two days after the company gained FDA clearance for its Senhance surgical robot. The clearance is certainly good fundamental news for the company, but the stock’s meteoric 200 percent two-day gain suggest a short squeeze may also be in play.

Following the FDA clearance, at least one company insider has taken advantage of warrants that automatically expired on Tuesday night. Director Andrea Biffi purchased 250,000 shares of Transenterix at the $1 per share exercise price.

With all the positive momentum for the stock, it’s understandable why short sellers could be throwing in the towel on Transenterix trade.

Short Interest

According to Yahoo Finance, there are relatively few Transenterix short sellers out there. There are only about 6.9 million shares held short, which represents a relatively modest short percent of float of 8.0 percent. However, with such a small float of only 106.4 million shares, a rush to cover could have a major impact on a stock like Transenterix. With such a small float and low share price, it can also be difficult for new short sellers to balance out a big positive move if shares become difficult or impossible to borrow.

On Wednesday around 10:20 a.m. ET, Dow Jones reported there was a short sale restriction on Transenterix. Benzinga was unable to confirm what exactly this would indicate.

Technical traders are looking to the stock’s chart to try to determine where it could be headed next. The stock bounced in the low $2 range on Monday and has remained above its Oct. 2016 high water mark of $2.33 ever since. The $5.00 psychological resistance level has been the near-term ceiling for the stock so far.

Traders should watch closely in coming days to see if Transenterix narrows its trading range or beaks out either above $5.00 or below $2.30.

Related Link: Is Transenterix Really A Threat To Intuitive Surgical?