History Says Buy Calls on This Biopharma Stock

IMMU stock could surge in the next month, if the latest options signal is correct

Aug 31, 2018 at 1:28 PM
facebook twitter linkedin


Shares of Immunomedics, Inc. (NASDAQ:IMMU) are up 2.1% to trade at $26.55, and are pacing for a sixth straight day of gains -- their longest win streak since early June. In fact, IMMU stock has added more than 19% so far this week, and is set for its best week of 2018, as the shares extend last week's post-earnings momentum. What's more, now could be a prime time to buy call options the biopharma concern, which is knocking on the door of new highs.

Immunomedics stock has advanced more than 110% in the past year, with several pullbacks contained by its 120-day moving average.The equity is now testing a familiar ceiling in the $26-$28 neighborhood, which has contained several rally attempts in 2018.

IMMU stock chart aug 31

In light of a post-earnings volatility crush, unusually low volatility expectations are being priced into near-term IMMU options. This is based on its Schaeffer's Volatility Index (SVI) of 51%, which sits in the low 4th percentile of its annual range. In simpler terms, short-term Immunomedics options are attractively priced right now.

The last six times IMMU has traded within 2% of its 52-week high while sporting an SVI in the bottom 20% of its annual range, it produced a positive one-month return 83% of the time, averaging a gain of 14.8%, per Schaeffer's Senior Quantitative Analyst Rocky White. A similar rally from current levels would place the biopharma stock north of $30 -- territory not charted since the shares were exploring all-time highs in March 2000.

There's plenty of sideline cash to fuel additional upside for the stock, too. Short interest represents more than 16% of IMMU's total available float, and would take more than three weeks to buy back, at the equity's average trading volume.

Bernie's Best Stock Bets for Summer 2021

1608308875

 




 
Special Offers from Schaeffer's Trading Partners