Altimmune (NASDAQ: ALT) stock price continued its short squeeze this week, soaring to a high of $14.52, its highest point since February 6th last year. The company’s stock surged by more than 580% from its lowest level in 2023. This surge has brought its total market cap to over $608 million.

ALT stock price has jumped sharply in the past few months in a high-volume environment. The most recent data shows that the three-month volume rose to $12.6 million. This week, the daily volume has moved to over $36 million. A few months ago, its total daily was averaging less than 1 million shares.

Altimmune shares have surged as investors cheered its progress in developing a weight loss drug. In a statement in December, analysts at JMP Securities noted that the drug was doing better than that developed by other companies.

Therefore, if the ongoing trial brings strong results, analysts believe that Altimmune will become a good acquisition target by some of the bigger companies. 

There are signs that these healthcare giants are considering buyouts to enter into an industry that is growing rapidly. In December, Roche acquired Carmot in a $2.7 billion deal.

Altimmune shares also surged as Viking Therapeutics (VKTX) stock jumped after positive results for its drug. 

The other reason for this price action is that the company has become a target of short-sellers, which has triggered a short squeeze. 

In a report, Kerrisdale Capital noted that Altimmune’s drug, pemvidutide was still inferior compared to Ozempic and Mounjaro. The latter two, because of their first mover advantage, will continue doing well over time.

The short report also noted that the drug had worse side effects and that big and small companies are researching on tens of drugs. Novo Nordisk and Eli Lilly are continuing with further research to improve their existing products.

Also, there are substantial concerns about the side effects of these drugs, their costs, and their withdrawal symptoms. 

ALT chart by TradingView

The weekly chart shows that the ALT share price has been a bit volatile in the past few months. The Average True Range (ATR), which is a popular volatility indicator, has risen to 2, its highest point since May 2023. 

Now, the stock has jumped above the 200-week Exponential Moving Average (EMA) and crossed the crucial resistance point at $12.95, its highest level on January 8th of this year. 

Therefore, I suspect that this volatility will continue in the coming days as investors focus on the GLP drug industry. This means that the stock could see double-digit gains or losses in the coming days. If this happens, the key support and resistance points to watch will be at $10 and $17.50.

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