Sorrento Therapeutics' rapid antigen test will soon roll out in Mexico
The shares of Sorrento Therapeutics Inc (NASDAQ:SRNE) are up 6.1% to trade at $8.10 at last check, after news that the company has initiated the start of its Covid-19 test roll-out in Mexico. The rapid antigen test, Covi-Stix, was just approved by the Mexican government.
On the charts, today's pop has SRNE breaking out past the 50-day moving average, which has been a source of overhead pressure since late February. The shares are now up 21% year-to-date, but remain a ways off their Aug. 10 five-year high of $19.39.
Don't expect much from the brokerage bunch, as analysts are overwhelmingly bullish on Sorrento Therapeutics stock already. All four in coverage carry a "strong buy" rating, while the security's 12-month consensus price target of $27.50 is a whopping 239% premium to current levels.
A short squeeze could keep the wind at the stock's back. Shorts have already started to jump ship, with short interest down 10% in the two most recent reporting period. Yet short interest still makes up an impressive 43.6% of the stock's available float and at the stock's average pace of trading, it would take over six days to buy back these bearish bets.
Over in the options pits, calls are winning out after today's news. So far, 7,279 calls have crossed the tape, which is triple what's typically seen at this point. The weekly 6/4 8-strike call is the most popular today, followed by the 9-strike call in the same series.
These options are attractively priced at the moment, per the stock's Schaeffer's Volatility Index (SVI) of 81%, which stands higher than just 5% of all other readings in its annual range. This implies that options players are pricing in relatively low volatility expectations.