Shares of Valeant Pharmaceuticals International (VRX) have plunged another 12% since I recommended selling its dead-cat bounce last Friday, when the stock traded at around $25 per share. The stock closed Thursday at $22.42, down more than 5%.

Valeant's chart now says it's likely going lower, towards $20 -- its next level of support. Take a look at the chart, , courtesy of TradingView.

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Fundamentally, Valeant has problems, including $31 billion in debt that the company is selling assets to pay off. But selling revenue-generating assets would undermine Valeant's long-term growth potential.

Valeant's technical metrics are now in control of the stock. And those appear even worse than the fundamentals.

Valeant shares are now trading well below their critical 20-day ($26.30), 50-day ($29.71) and 100-day ($47.36) moving averages, underscoring how badly broken the stock has become. Only good news could fix the stock, but that's been hard to find.

The best investors could hope for is that Valeant's fundamentals have already seen the worst.

Until then, the technicals point to $20 per share (solid blue line) as the near-term target, an almost 11% decline from Thursday's closing price. The stock has shown that it can't break resistance at around $26. It has tested that level three times in the past eight trading days and has failed each time. With investors deep in the hole, the stock will likely be met with heavy selling pressure with any move that generates gains of more than 1%.

Relatively high short interest still remains, despite the punishment the stock has already suffered. As of the most recent settlement date, Valeant shares had some 26.26 million shares sold short, marking an 8% increase from the prior report. This accounts for more than 10% of the outstanding shares, meaning any glimpse of good news could create a short squeeze.

Again, the rise from any short squeeze will be limited, as shareholders who are currently stuck are eager for an opportunity to sell.

The bet here is that, given the rising short interest, the stock will sink to $20 before it goes higher, a 10.7% gain on the short side.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.