Biopharmaceutical stock Nektar Therapeutics (NASDAQ:NKTR) is down 0.5% this afternoon, last seen at $22.02. NKTR has recently struggled to gain momentum, but earlier this month touched its highest intraday mark since an early August post-earnings sell-off. Today's drop may be short-lived, however, as data from Schaeffer's Senior Quantitative Analyst Rocky White suggests NKTR may be flashing a buy signal as it nears a historically bullish trendline.
Specifically, Nektar Therapeutics stock has come within one standard deviation of its 40-day moving average, following an extended period above the trendline. The equity has seen five similar pullbacks within the past three years, which has resulted in an average 21-day gain of 31.2%, with 75% of the returns positive. Another move of this magnitude from the stock's current perch would catapult NKTR back near $30 for the first time since August.
However, short sellers have been heading for the exits. Short interest dropped a notable 8.8% during the past two reporting periods, and now accounts for nearly 17% of NKTR's total available float.
At the security's average pace of daily trading, it would take shorts an extended six months to buy back their bearish bets. An extended round of short covering could create bigger tailwinds for NKTR stock.