Q2 STOCKS TO BUY

2 Drug Stocks Ripe For A Short Squeeze

SRPT stock is pacing for its best month since 2016

Managing Editor
Mar 13, 2018 at 10:21 AM
facebook X logo linkedin


Drug stocks Bellicum Pharmaceuticals (NASDAQ:BLCM) and Sarepta Therapeutics Inc (NASDAQ:SRPT) are both trending higher this morning. Bellicum reported some encouraging interim drug data, while Sarepta was the subject of another bullish brokerage note. What's more, a short squeeze could add fuel to the fire for both BLCM and SRPT stocks.

Positive Cancer Drug Data Boosts Bellicum Stock

Bellicum stock is up 7% to trade at $8.60, after the company reported upbeat interim data on its bone marrow cancer treatment. Bellicum plans to initiate a pediatric registration study for the end of the year.

BRCM shares have gained more than 70% since touching a record low of $5.02 on Jan. 31, when they gapped lower on the Food and Drug Administration's (FDA) halt of BPX-501 trials following cases of brain damage. The stock today is now set to close atop its100-day moving average for the first time since mid-October.

A short squeeze could provide even more tailwinds for the drug stock. Short interest soared by 14% during the last reporting period, to 5.26 million shares. This represents nearly 19% of BLCM's total available float, and at the stock's average daily trading volume, nearly one week of pent-up buying power.

Credit Suisse Predicts Multi-Year Highs for Sarepta Stock

Sarepta Therapeutics stock is up 3.4% to trade at $82.08, and just notched a new 17-year high of $82.65, as analysts continue to wax optimistic on the company's recent drug news. Specifically, Sarepta yesterday said it plans to file for accelerated FDA approval of its Duchenne muscular dystrophy (DMD) drug by the end of the year. As such, Credit Suisse this morning hiked its price target to $100 from $81 -- a 22% premium to the stock's current perch.

SRPT shares have carved out a path of higher highs and lows since mid-2017, guided by their rising 10-week and 20-week moving averages. The equity has now added more than 31% in March, on pace for its best month since September 2016.

Options traders have displayed bullish tendencies of late. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) confirms a substantial call bias, with long calls outnumbering long puts by a nearly seven-to-one ratio in the past two weeks.

SRPT remains heavily shorted, so some of this call buying -- particularly at out-of-the-money strikes -- could be short sellers using options to hedge against even more upside. As it stands now, short interest represents 16% of the stock's float, and based on average daily volumes, it'd take more than eight sessions for these bears to cover their positions.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter