bluebird bio Stock Bounces on Cancer Drug Update

Much of the stock's recent support stemmed from the rising 160-day moving average

Managing Editor
Jun 4, 2018 at 9:53 AM
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Biotech concern bluebird bio Inc (NASDAQ:BLUE) is higher in today's trading after the company reported data for its immunotherapy drug bb2121, which showed cancer patients survived for a median of roughly 12 months after receiving the treatment before their conditions worsened. In response, BLUE is 2.4% higher to trade at $186.80.

This price action is more of the same for bluebird stock, as the shares have enjoyed support from the 160-day moving average since early April, and over the past 12 months have gained almost 130%. They still have some ground to make up, however, to revisit their record high of $236.17 on March 13.

Analyst sentiment is mostly bullish. Of the 20 firms covering BLUE, 13 currently hold "strong buy" ratings. Further, the stock's average 12-month price target stands at $216.67 -- a 16% premium to current levels.

On the other hand, short interest is elevated. Although short interest on BLUE fell almost 5% during the most recent reporting period, it still accounts for 7.8% of the equity's total available float, or seven times bluebird bio stock's average daily trading volume.

Echoing this skepticism, BLUE's Schaeffer's put/call open interest ratio (SOIR) of 1.06 ranks higher than 97% of all comparable readings taken in the past year. In other words, options traders are more put-heavy than usual among contracts set to expire in three months or less.

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