Incyte Stock Dips Despite Dermatitis Drug Buzz

INCY shares are just coming off a 10-month high

Deputy Editor
Feb 4, 2019 at 10:32 AM
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The shares of Incyte Corporation (NADSAQ:INCY) were pointed higher in pre-market trading, after the company's experimental atopic dermatitis treatment met the main goal in two late-stage studies. The drug, which is being marketed as Olumiant, was jointly developed with pharma giant Eli Lilly (LLY). However, INCY shares have since turned lower, down 1.6% at $81.57.

The stock is coming off a 10-month high, and recently popped above the $80 area for the first time since an early April bear gap. In fact, the shares gained 26.7% in January -- their biggest one-month gain since 2014. Their 14-day Relative Strength Index (RSI) now sits at 69 -- in the cusp of overbought territory, suggesting a short-term breather may have been in the cards for INCY.

The majority of analysts are bullish on INCY stock. Eleven give it a "strong buy" rating and one considers it a "buy," compared to six doling out tepid "holds" and not a single "sell" to be found. On the other hand, the consensus 12-month price target of $85.63 falls right in line with current levels. Should the shares extend their 2019 rally -- or should Incyte report stronger-than-expected earnings next week -- there's room for price-target hikes. 

Options traders have been generally optimistic on the equity, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing INCY's 10-day call/put volume ratio of 4.44 sits higher than 76% of all other readings from the past year. This indicates a healthier-than-usual appetite for bullish bets over bearish of late. However, the stock's Schaeffer's Volatility Scorecard (SVS) sits at a low 8 out of a possible 100, indicating INCY has fallen short of options traders' volatility expectations in the past year.

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