2 Healthcare Stocks Not Selling Off Today

Amazon healthcare news has revived rumors of a potential partnership with Cerner

by Karee Venema

Published on Jan 30, 2018 at 1:54 PM
Updated on Jan 30, 2018 at 1:55 PM

The major U.S. benchmarks are spiraling for a second straight day, as the 10-year Treasure yield hovers near a three-year peak, and healthcare stocks spiral. But while steel name AK Steel Holding Corporation (NYSE:AKS) sinks alongside the broader stock market, biotech Achaogen Inc (NASDAQ:AKAO) and healthcare technology firm Cerner Corporation (NASDAQ:CERN) are both in positive territory. Here's a closer look at what's moving shares of AKS, AKAO, and CERN today.

AK Steel Stock Reverses Lower After Earnings

After an initial jump out of the gate, AK Steel stock was last seen down 11.9% to trade at $5.55 -- pacing for its worst day since late October. The company earlier reported an adjusted fourth-quarter loss of 6 cents per share on $1.5 billion in revenue -- better than analysts were expecting.

This negative price action just echoes AKS stock's longer-term trend, though, with the shares down 32.5% year-over-year. What's more, the shares have breached recent support near $5.74 -- home to their 200-day moving average, and a 38.2% Fibonacci retracement of their November-to-January rally.

In spite of these technical troubles, put options are unusually cheap compared to their call counterparts. AK Steel's 30-day implied volatility skew of negative 3% ranks in the 4th percentile of its annual range.

Achaogen Stock Set to Snap Six-Month Losing Streak

The Food and Drug Administration (FDA) upgraded the status of Pfizer's (PFE) McPherson facility, which manufactures Achaogen's plazomicin -- potentially clearing the way for regulatory approval of the urinary tract infection treatment. As a result, AKAO stock is up 11% to trade at $12.27, and on track to snap its record-setting six-month losing streak.

More specifically, AKAO shares have shed nearly 30% over the past six months, and hit a 12-month low of $10.24 as recently as Dec. 5. Part of this downside has likely been due to a steady stream of selling pressure from shorts. Short interest is up 86% since mid-July to 10.7 million shares -- the most on record.

Cerner Stock Pops on Revived Amazon Partnership Rumors

Cerner stock is up 1.4% to trade at $69.68, as news of a high-profile healthcare initiative has reignited speculation of a possible partnership with Amazon. The shares have already put in a solid performance on the charts over the past 12 months -- up 31.5% -- while a pullback from their Oct. 13 two-year high of $73.86 was quickly contained by CERN's 200-day trendline.

Short sellers, meanwhile, have been in cover mode in recent months. Since mid-September, short interest on CERN is down 46% to 9.3 million shares. And while this represents the fewest number of bearish bets in at least 16 years, they still represent roughly six days' worth of trading, at Cerner's average daily volume.

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