AZN Drops After Pausing COVID-19 Vaccine Trials

The equity is up over 24% year-over-year, however

Digital Content Manager
Sep 9, 2020 at 10:58 AM
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The shares of AstraZeneca plc (NYSE: AZN) are down 1.4% at $53.92 at last check, after the company suspended global trials of its experimental coronavirus vaccine after a participant presented an unexplained illness. AstraZeneca officials said in a statement an independent committee will review safety data, and that this is a routine action to ensure trial integrity. They also added they are working to minimize potential impacts on delivery timeline.

The security has been cooling off over the past couple of weeks. Though shares previously surged to an all-time high of $64.94 on July 20, the stock has been fighting overhead pressure at the $58 level for the last two months. Now, the security is dropping further below that level, with the once supportive 60-day moving average recently coming in as ceiling. Nonetheless, AZN is still up 24.3% year-over-year.

Analysts are optimistic towards AstraZeneca stock, with five of the six in coverage sporting a "strong buy," and only one carrying a tepid "hold" rating. Meanwhile, the equity's 12-month consensus target price of $59.10 is a 10% premium to current levels.

That optimism is echoed in the options pits, where calls are popular. The security sports a 10-day call/put volume ratio of 12.86 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 78th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.

Traders looking to speculate on AstraZeneca stock's near-term trajectory should consider options. The security's Schaeffer's Volatility Index (SVI) of 33% sits in the 25th percentile of its annual range, suggesting short-term options are pricing in relatively low volatility expectations. In other words, the stock's near-term options are attractively priced at the moment.

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