NewLink bulls see more upside
Biotech has been hot, and the bulls are sticking with NewLink Genetics.
optionMONSTER's Heat Seeker monitoring program first detected activity on Friday as traders moved into the August 40 calls for $7. The oncology stock was pushing against its 50-day moving average at the time, and quickly broke out.
Our premium subscribers rang up profits as the calls surged to $9 and then $11.30. They're worth even more now, and the big money is rolling higher. This time, Heat Seeker shows that 1,953 August 40s were sold for $13.70 and an equal number of August 45s were bought for $9.70.
Rolling the position let the investor recover $4 of his or her capital, while keeping them exposed to further upside if the rally continues. It works because long calls lock in the price where shares can be purchased. (See our Education section)
NLNK is off 0.5 percent to $51.93 in afternoon trading. The stock fell hard to its 200-day moving average in May after saying it wouldn't modify Phase III trials of its pancreatic-cancer drug, rebounded and then spent a month consolidating in the mid-$40s.
Share are up 24 percent in the last week as investors flock back to the sector. Today's rally was partially triggered by Celgene's $7.2 billion purchase of Receptos.
Total option volume is 6 times greater than average so far today, with calls outnumbering puts by a bullish 20-to-1 ratio.
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