Biogen Inc (NASDAQ:BIIB) stock suffered its worst day in 14 years on March 21, when it gapped 29.2% lower on a pair of halted Alzheimer's disease drug trials. The shares have since struggled to surpass these bear gap levels below $235 -- last seen up 0.4% at $230.13 -- but some short-term upside could be in the cards, if history is any guide.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, BIIB has been one of the best stocks to own on the S&P 500 Index (SPX) during the Memorial Day week, looking back 10 years. Specifically, the drugmaker has averaged a 1.7% gain over the holiday-shortened period, with eight of those returns positive.
Options traders have been betting on a bounce for Biogen. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 2.66 ranks in the 90th annual percentile, meaning calls have been bought to open over puts at a faster-than-usual pace.
Given the stock's recent struggles, it's possible shorts are using long calls to guard against any upside risk. Short interest jumped 11.3% in the two most recent reporting periods to 3.96 million shares, though this still accounts for a low 2% of BIIB's float.