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AstraZeneca Stock Up After Positive Cancer Drug Trials

AZN is up over 50% year-over-year

Deputy Editor
May 29, 2020 at 10:25 AM
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The shares of AstraZeneca plc (NYSE:AZN) are up 1.7% at $54.43 this morning, on positive news regarding its cancer drug Tagrisso. According to a report, a phase-two trial succeeded in holding back a certain early-stage lung cancer, opening the treatment up to a potentially much larger sales boost. An analyst at Jefferies says the results will drive the company to seek fast-track approval, and possibly yield $3 billion in sales.

On the charts, AstraZeneca shares have seen a steady rise since a mid-March bear gap culminated in an annual low of $36.15. The shares have battled back to hit an all-time high of $57.44 on May 21, with their 20-day moving average containing any pullbacks. In the last 12 months, AZN is up 46.5%. 

As such, most members of the brokerage bunch covering AstraZeneca are optimistic, with five of the six in coverage sporting a "strong buy." However, the consensus 12-month price target is a 7% discount to last night's close, implying more bull notes could vault AZN higher in the short term.

In the options pits, calls are the clear winner. In the last 10 days, 29.93 calls were bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a ratio that sits in the 97th percentile of its annual range. It's more of the same today, with calls trading at three times the average intraday amount and new positions being opened at the weekly 6/12 55.50-strike call.

Now is certainly the time to pursue options, per the stock’s Schaeffer's Volatility Index (SVI) of 33%, which sits in the 25th percentile of its annual range. This means options players have been pricing in relatively low volatility expectations at the moment.  


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