Why is the Chalice Mining share price rocketing 20% today?

The Chalice Mining Ltd (ASX: CHN) share price is having a stunning session on Wednesday.

In afternoon trade, the mineral exploration company’s shares are up 20% to $1.22.

Why is the Chalice Mining share price jumping?

Investors have been scrambling to buy the company’s shares today despite there being any news out of it.

Though, it is worth noting that Chalice Mining released a presentation yesterday ahead of its appearance at the BMO Global Metals & Mining Conference.

This presentation highlighted its 100% ownership of the Gonneville project. It is the largest undeveloped palladium resource and one of the largest critical minerals discoveries in the western world.

Speaking of palladium, the price of the metal has recently started to rebound after falling heavily over the last couple of years.

And while it is still a long way from its February 2022 levels, investors may believe that this recent recovery means that a bottom has finally been reached.

What else?

It’s possible that we are witnessing a short squeeze on Wednesday.

A short squeeze is what happens when short sellers scramble to buy shares so they can close their positions.

Demand can get so strong on the buy side that it drives a share price higher and higher. This in turn can lead to other short sellers trying to close positions in a hurry, driving a share price even higher.

As per our more recent update on short selling data, the company had short interest of 9%. This means that 9% of its shares outstanding were in the hands of short sellers.

And while they may be getting burned today, they aren’t likely to be overly concerned. The Chalice Mining share price remains down 80% over the last 12 months.

The post Why is the Chalice Mining share price rocketing 20% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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