Exact Sciences Stock On Track for Best Day In Over a Year After Pfizer Deal

EXAS shares just flashed a 'buy' signal this week

Managing Editor
Aug 22, 2018 at 10:13 AM
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EXACT Sciences Corporation (NASDAQ:EXAS) stock is jumping today, after the healthcare company secured a marketing deal with Pfizer (PFE) for its stool screening test to help detect colorectal cancer. In response, EXAS is up 22.3% to trade at $61.19.

Today's burst has Exact Sciences stock on track for its best day since April 2017, and it's now on pace to fill its Aug. 2 earnings-induced bear gap. The pullback was contained by the shares' 320-day moving average, with EXAS shares just flashing a "buy" signal on Tuesday. 

A continued exodus from short sellers could provide more fuel for the stock's fire. Short interest fell by 7% in the two most recent reporting periods. However, these bearish bets still represent a healthy 9% of EXAS' total available float, and seven days of pent-up buying power, at the security's average pace of trading. 

In the options pits, traders have been heavily bearish in recent weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the the equity's 10-day put/call volume ratio of 2.23 ranks in the 91st annual percentile. In other words, EXAS puts have been purchased over calls at a much faster-than-usual clip in the past two weeks. An extended upswing could lead to an unwinding of these bearish bets.

Shifting gears to today, though, calls are all the rage. EXAS calls are trading at 10 times what's typically seen at this point in the day, with more than 3,500 contracts exchanged, and volume pacing for an annual high. Leading the charge is the weekly 8/24 65-strike call, where it appears new positions are being purchased. In doing so, the buyers expect Exact Sciences stock to rally atop $65 by the close on Friday, Aug. 24.

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