SGEN’s peak comes amid historically low implied volatility
Biotech stock Seagen Inc (NASDAQ:SGEN) scored an all-time high of $215.04 today, building on a Friday breakout from a consolidation between $204 and $210. The shares sport a healthy 67.1% lead in 2023, with support stemming from its 40-day moving average. The good news is, if past is precedent, SGEN could have more room to run.
Today’s record peak comes amid historically low implied volatility (IV), per Schaeffer’s Quantitative Analyst Rocky White, a bullish combination in the past. White’s data points to five other signals in the last five years when SGEN was trading within 2% of its 52-week high, while its Schaeffer’s Volatility Index (SVI) was in the 20th percentile of its annual range or lower.
This is now the case with the equity’s SVI of 13%, which is in the low 10th percentile of its annual range. One month after these signals, the shares were higher 80% of the time, averaging a 4.2% gain. From its current trading level, a similar move would put Seagen stock at a fresh record high of $224.07.
Short-term options traders lean overwhelmingly bearish, indicating a change of heart could bide well for SGN. This is per the equity’s Schaeffer’s put/call open interest ratio (SOIR) of 1.81 that sits in the 98th percentile of annual readings. Echoing this, SGEN’s 10-day put/call volume ratio of 11.05 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than all readings from the past year.