Bulls Bet on More Upside for Amgen Stock

PDC Energy is buying SRC Energy in a deal worth roughly $1.7 billion

by Karee Venema

Published on Aug 26, 2019 at 2:14 PM
Updated on Aug 26, 2019 at 2:43 PM

The stock market is soaring today on upbeat U.S.-China trade headlines. Among individual stocks making notable moves are biotechs Amgen, Inc. (NASDAQ:AMGN) and Arcadia Biosciences Inc (NASDAQ:RKDA), as well as oil name PDC Energy Inc (NASDAQ:PDCE). Here's a quick look at what's moving the shares of AMGN, RKDA, and PDCE.

Options Bulls See More Upside for Amgen Stock

Amgen stock is up 3% at $204.97, on news the company will pay $13.4 billion in cash for the global rights to Celgene's (CELG) psoriasis drug, Otezla, as a means of easing U.S. antitrust concerns over Bristol Myers Squibb's (BMY) $74 billion deal to buy CELG. AMGN shares scored back-to-back bull gaps earlier this month on a patent win for the firm's rheumatoid arthritis drug, Enbrel, and have since consolidated atop their Aug. 9 highs near the round $200 mark.

Options traders have been betting on more upside for AMGN stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 2.24 registers in the 95th annual percentile, meaning calls have been bought to open at a quicker-than-expected pace.

Arcadia Biosciences Stock Adds to August Gains

Arcadia Biosciences shares have shot up 34% to trade at $8.67, after the GoodWheat maker said Matthew Plavan will replace retiring Raj Ketkar effective Sept. 1. The company also gave revenue guidance for 2020 and 2021, and unveiled a wheat-selling agreement with Arista Cereal Technologies and Bay State Milling Co.

It's been a red-hot month for RKDA stock, which more than doubled on Aug. 9, after a regulatory nod for the company's drought-resistant soybeans. The shares are pacing for a 295% August gain, which would mark their biggest monthly return since a 440.8% advance in March 2018.

Analysts have set their sights even higher. While the two brokerages in coverage maintain a "buy" or better rating on RKDA stock, the average 12-month price target sits all the way up at $17.

PDC Energy Stock Rally Contained Near Key Trendline

PDC Energy said it will buy SRC Energy (SRCI) in an all-stock deal valued at $1.7 billion, which includes roughly $685 million in SRCI debt. In reaction, PDCE stock is up 10.6% to trade at $4.59, but running out of steam near its 50-day moving average -- a trendline that's ushered the shares lower since an early May bear gap.

Short sellers have been actively targeting a stock that's shed 23% in the past six months. Specifically, short interest rose 40% in the Feb. 1 through Aug. 1 reporting periods to 8.14 million shares. This represents 13.1% of PDCE stock's available float, or 6.2 times the average daily pace of trading.

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