2 Drug Stocks Making Major Moves on the Charts Today

By Emma Duncan / October 16, 2017 / www.schaeffersresearch.com / Article Link

U.S. stocks are trading higher this morning, with major equity indexes setting fresh record highs out of the gate in anticipation of the first full week of corporate third-quarter earnings. Among the stocks making moves this morning are online sales concern JD.com, Inc. (NASDAQ:JD), along with biopharmaceutical names Exelixis, Inc. (NASDAQ:EXEL) and TG Therapeutics, Inc. (NASDAQ:TGTX). Here's a closer look at what's moving shares of JD, EXEL, and TGTX.

JD Bounces After Upbeat Barron's Article

Shares of JD stock are on their way up after an upbeat Barron's article on the China-based online retailer. Specifically, Barron's said that the stock could rise 30% or more over the next year, and is a better deal than Alibaba (BABA). JD.com stock is up 2.1% at $39.53, on pace to challenge its overhead 20-day moving average. JD has gained more than 55% year-to-date, though the shares have yet to recover from a mid-August earnings miss.

Most analysts are already optimistic towards JD, with nine out of 11 issuing "buy" or better recommendations. However, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows options traders are leaning bearish towards JD. The stock currently sports a 10-day put/call volume ratio of 0.31, which ranks in the 75th percentile of its annual range -- suggesting puts were bought to open at a faster-than-usual pace relative to calls during the past two weeks.

Exelixis Vaults Higher on Expanded Label Hopes

Pharma stock Exelixis is making moves this morning after its liver cancer drug, Cabometyx, met the key goal in a late-stage trial -- clearing the path for an expanded label approval by U.S. regulators. EXEL is currently trading up 28.3% at $31.76, gapping above short-term resistance at its 80-day moving average in the process. The stock has more than doubled year-over-year, and capped off today's early gains by touching a new 17-year high of $32.33.

Today's EXEL rally could be the result of a short squeeze, as the stock's short-to-float ratio currently stands at 7.1%. At the equity's average daily trading volume, it would take more than a week for all of these bearish bets to be covered.

TGTX Tanks Into Single Digits on Regulatory Hiccups

TG Therapeutics stock is down this morning, after the FDA flagged a potential "review issue" for TG-1101, which could put accelerated approval for the drug at risk. At last check, TGTX was trading 12.1% lower at $9.68, breaking below consistent support in the $10 region. The stock is now at risk of closing below its 200-day moving average for the first time since early March.

Short sellers have a fairly massive position on TGTX, with 45.6% of the stock's float sold short -- even after a 9% drop during the most recent reporting period. Of course, given the magnitude of today's decline, short selling is temporarily restricted on TGTX.

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