Short Covering Detected on Surging Cancer Stock

The shares are higher today on a positive drug development

The shares of Clovis Oncology Inc (NASDAQ:CLVS) are up 1.3% in electronic trading, on news the pharmaceutical firm's ovarian cancer treatment, rucaparib, is now available in Germany for women with relapsed ovarian cancer. CLVS also plans to launch the drug in other European countries later this year and in 2020.

It's already been a blowout start to the year for CLVS stock, which is up 67% year-to-date through last Friday's close at $29.99. Should today's premarket price action pan out, the shares could log their highest close since early October, though their 200-day moving average looms just overhead -- a trendline that hasn't been surpassed on a daily closing basis since November 2017.

The stock's recent burst higher has short sellers starting to throw in the towel. Short interest edged down 2.7% in the most recent reporting period, yet the 11.93 million shares still dedicated to these bearish bets represent 34.7% of CLVS' available float, or 7.5 times the average daily pace of trading -- indicating theie's plenty of buying power sitting on the sidelines.

Some of these remaining shorts may have initiated an options hedge against any additional upside risk, though. The March 32 call is home to peak open interest on CLVS stock, and data from Trade-Alert suggests buy-to-open activity occurred here last Thursday, Feb. 28.