TherapeuticsMD Stock Bulls Get a Win with Imvexxy Approval

In the options pits, traders were selling to open TXMD calls

May 30, 2018 at 9:29 AM
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Women's health specialist TherapeuticsMD Inc (NASDAQ:TXMD) is seeing its stock rally today, up 4.5% at $6.72, thanks to news the Food and Drug Administration (FDA) approved its hormone therapy Imvexxy for the treatment of vulvar vaginal atrophy -- marking the company's first approved drug. As such, Cantor Fitzgerald -- which sent the stock soaring back in November -- reiterated its $26 price target and "overweight" rating.

Wall Street was already in love with TXMD, as all seven analysts in coverage have "strong buy" ratings on the shares, and the average 12-month price target is $14.44, more than double current levels. However, there are plenty of skeptics outside the analyst community, with almost one-third of the equity's float controlled by short sellers. This would suggest TherapeuticsMD stock could be a short squeeze candidate.

As for options data, call buying has been popular -- but so has call selling. Peak open interest sits at the June 7 call, and the June 5 and 6 strikes are also home to notable open interest, while data shows a mix of buy- and sell-to-open activity at each of these contracts. Meanwhile, the June 8 call saw a lot of buying activity in recent weeks.

Looking at the charts, the shares have been trending higher since late March, guided higher by their 20-day moving average and recently overtaking the 200-day moving average. Overall, TXMD was up almost 62% year-over-year even before today's pop.


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