SAGE Stock Set to Sell-Off After Seizure Drug Failure

By Josh Selway / September 12, 2017 / www.schaeffersresearch.com / Article Link

U.S. stocks look poised to extend Monday's huge rally. Among specific stocks in focus are biotech stocks Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and SAGE Therapeutics Inc (NASDAQ:SAGE), as well as e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN). Here's a quick look at what's boosting shares of TEVA, SAGE, and AMZN.

TEVA Stock Looks for More Upside After Paragard Sale

Teva Pharmaceutical is in focus again, with the company announcing it's selling its Paragard brand for $1.1 billion. The shares are now ready to open 6.8% higher, after closing yesterday at $18.50 -- their highest close in over a month. Still, TEVA remains 63.2% lower during the past 12 months, and Jefferies this morning cut its price target to $21 from $26. As such, the equity is trying to pull itself out of oversold territory, with its 14-day Relative Strength Index (RSI) last seen at 19.

Drug Trial Results Crush SAGE

SAGE Therapeutics stock is getting torched ahead of the open, falling 24.3%, after the company's seizure drug failed in a late-stage trial. This is a stunning setback for an outperforming equity, with the shares adding 127% year-over-year to trade at $88.52, while hitting a record high of $90.80 just last week.

A round of bearish analyst attention could follow today's news. For example, nine of 11 brokerage firms say to buy SAGE stock. Watch out for downgrades to come through in the near term and pressure the security even lower.

Whole Foods Foot Traffic Increases After Amazon Deal

Amazon stock is edging higher this morning, thanks to reports that customer traffic at Whole Foods has increased 25% since it was bought out by the e-commerce company. AMZN shares settled yesterday at $977.96, up 30.4% year-to-date. However, the security's formerly supportive 50-day moving average has served as a technical ceiling since early August. Either way, it's a good time to target near-term options, based on Amazon's Schaeffer's Volatility Index (SVI). This reading of 17% sits just 13 percentage points from a 12-month high, meaning volatility expectations are relatively muted at the moment for short-term contracts.

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