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Biotech Climbs on Upbeat Coronavirus Test Data

The test is consistent in independent field evaluations

Deputy Editor
May 1, 2020 at 12:03 PM
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Shares of Co-Diagnostics Inc (NASDAQ:CODX) are surging 11.4% to trade at $12.63, after the molecular diagnostics company shared its COVID-19 test performance data. The test consistently demonstrates 100% sensitivity as well as specificity across independent field evaluations. 

Co-Diagnostics has had a volatile stretch on the charts, as its coronavirus testing unit continues to make headlines. The equity gapped to a record peak of $21.75 on Feb. 28, but since has pulled back, and is now trading sideways, with a stiff ceiling at $16. However, the 50-day moving average has been a long-term trendline of support, and the stock is still up an impressive 283% in the last three months. 

Short interest has started to peter out, but the 4.73 million shares sold short still account for 27.8% of the stock's available float. In simpler terms, it would take less than a day for shorts to buy back their bearish bets at CODX's average pace of trading. 

Now looks like an affordable time to buy CODX shares, per the security's Schaeffer's Volatility Index (SVI) of 194%, which sits in the low 6th percentile of all other readings from the past year. This implies that near-term option traders are pricing in relatively low volatility expectations.

 

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