Regeneron Pharmaceuticals Set to Test Chart Support After Earnings

Long calls were unusually popular on REGN in recent weeks

May 7, 2019 at 9:22 AM
facebook twitter linkedin

Regeneron Pharmaceuticals Inc (NASDAQ:REGN) stock is trading down 3.7% ahead of the bell, after the biotech reported slimmer-than-expected first-quarter adjusted earnings of $4.45 per share. Regeneron revenue of $1.71 billion also missed the mark.

The shares have sold off sharply since their March 4 17-month high of $442. The stock's $330-$335 area has recently emerged as a floor, a region that coincides with a late-June bull gap, and cushioned pullbacks in late 2018. REGN stock is poised to test this floor once again today, set to open near $331, after closing last night at $344.23 -- down 7.8% year-to-date.

Options traders were optimistic ahead of Regeneron earnings. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 2.29 ranks in the 70th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

Echoing this, REGN's Schaeffer's put/call open interest ratio (SOIR) of 0.77 ranks in the 7th percentile of its 12-month range. In other words, short-term options traders are more call-heavy than usual on the stock.

Given REGN's longer-term troubles, it's possible short sellers are using some of these calls to guard against any upside risk. Short interest surged 23.1% in the two most recent reporting periods to 2.35 million shares -- still a low 2.9% of the security's available float, though.


Begin the New Year With Schaeffer's 7 FREE 2022 Stock Picks!



Special Offers from Schaeffer's Trading Partners