Schaeffer's Trading Floor Blog

Charts to Watch: Regeneron Pharmaceuticals Inc (REGN) Could Be Staging a Comeback

REGN is testing the $300 level and a significant trendline

by 4/3/2014 11:51 AM
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Up roughly 63% during the past 12 months, Regeneron Pharmaceuticals Inc (NASDAQ:REGN) appears poised to launch its next potential upleg. First, the stock is trading north of the round-number $300 level (though it is down 1.7% today at $301.69). This century mark corresponds roughly with a 10% year-to-date gain, and our analysis has shown that round-number year-to-date return levels frequently have technical importance. It will therefore be essential to see if REGN can maintain its footing above this doubly significant area.

Also, the stock is testing its 80-day moving average, and has been consolidating atop this trendline for the last several days. Data from our Senior Quantitative Analyst Rocky White reveals that previous pullbacks to this trendline (nine signals in all) have yielded an average 21-day return of more than 3.6%.

Daily chart of Regeneron Pharmaceuticals (REGN) since September 2013 with 80-day Moving Average

Turning to the options exchanges, during the last 10 trading days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), nearly 1.5 REGN puts have been purchased to open for each call. The resulting 10-day put/call volume ratio of 1.47 stands just 4 percentage points shy of an annual bearish peak.

In a similar vein, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.01 indicates that call open interest and put open interest are nearly equal among options expiring in the next three months. However, this ratio is higher than 80% of similar readings captured over the last 12 months. If Regeneron Pharmaceuticals Inc (NASDAQ:REGN) does manage to continue higher from here, skeptics in the options pits could be forced to reevaluate their negative opinion.

Schaeffer's put/call open interest ratio (SOIR) for Regeneron Pharmaceuticals (REGN)

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