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Signal Suggests Genetics Stock Has Room to Run

Fernanda Horner
·1 min read

The shares of Seattle Genetics, Inc. (NASDAQ:SGEN) are up 1.8% to trade at $189.68 this afternoon and hit an all-time-high of $190.23 earlier today. And while the biotechnology stock is already enjoying an impressive 149.2% year-over-year lead -- with support from the 10-day moving average over the last couple of weeks -- a historic bullish signal now flashing indicates even more upside for SGEN in the near future.

More specifically, the stock's recent peak comes amid historically low implied volatility (IV), which has been a bullish combination for SGEN in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been three other times in the past five years when the stock was trading within 2% of a 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower -- as is the case with the Seattle Genetics stock's current SVI of 39.5%, which sits under the 16th percentile of its 12-month range. More often than not, data shows the stock was higher a month later, averaging a return of 6.4% for that time period. From its current perch, a move of similar magnitude would put SGEN just under the $202 mark, at yet another record peak.

SGEN 2
SGEN 2

Analysts are mostly optimistic toward Seattle Genetics stock, with 11 of the 17 in coverage sporting a "strong buy" rating, and the remaining six carrying a tepid "hold." This means there is still some room for upgrades moving forward, which could push the security even higher.