Gauging Cynosure's Intense Rally Print
By Brian Wilson, Lead Contributor   
Tuesday, 30 October 2012 07:19

icon_marketmoverThe medical device company Cynosure Inc. (NASDAQ: CYNO) has been garnering more and more interest from biotech traders on its bullish momentum, which has brought the market currently thinks. This is based on the notion that Cellulaze is probably the best cellulite treatment currently available, which caters to the enormous portion of North America's female population that will develop cellulite at some point in their life.

Despite the obvious potential for Cellulaze, particularly in the United States (the biggest cosmetics market in the world), there are some signs that we may be getting a bit too optimistic on CYNO. Traders who are more contrarian in nature may be especially concerned that short interest is drying up quite rapidly. Using data from NASDAQ, note that as of October 15th short interest is down to 336,875 shares (which only only 3.37% of float). Total shares short has been in consistent decline since July 31st, when a total of $458,042 shares were being shorted. Trading volume on shares of CYNO has also been rising recently, which means that there's much technical trading risk for the bears since they can unravel their collective position a lot faster.

Anyone who missed CYNO's big rally this year should exhibit some caution, since a lot of the hype was (and is) associated with the sales potential of Cellulaze, which makes the stock relatively vulnerable to financial data. Even though the full market potential for Cellulaze is expected to be enormous, as mentioned earlier, Wall Street has already raised the

bar quite high for Cynosure. Even if the BMR:1