Anavex Life Sciences (NASDAQ: AVXL) is a short-squeeze candidate because its share prices are rising on good news, institutional and analyst support is growing, and the short-sellers are selling into the rally. Short interest topped 23% at the end of November and is unlikely to have fallen much since because they spiked to a one-year high, showing a high conviction—plenty of fuel for a short squeeze.
However, the rally beginning in late October was sparked by positive results from a 2b/3 study that showed a more than 36% reduction in Alzheimer's progression within the target group. Estimated at over $15 billion in potential sales, it is good news for the pharmaceutical company and investors, and it is compounded by numerous details that suggest a short squeeze is coming. The once-daily treatment makes it easy to use and safer than competitors, not taken orally. It is unlikely to require the same level of monitoring and is an industry-disrupting product.
