Biopharmaceutical company AstraZenica (NYSE:AZN) has been making an effort, like most of the market, to dig itself out of this month’s disastrous sell-off. The U.K.-based drugmaker bottomed out at $36.15 on March 16, and since then has added roughly 23% — closing the bear gap it suffered earlier in the month, just yesterday. And while the stock appears to be running out of steam today, trading flat at $44.55 at last check, it just ran up to a historically bullish technical signal that could help AZN on its next leg higher.
The technical signal in question is AstraZenica’s 40-day moving average, which the equity just came within one standard deviation of after a lengthy period below the trendline. According to a study from Schaeffer’s Senior Quantitative Analyst Rocky White, AZN has seen two similar signals in the past three years, and the equity was higher one month later both times, averaging a one-month return of 10.83%. a similar move, from AZN’s current perch, would put the security at $49.37, just below its late-January record highs.
Daily chart of AZN
Analysts are generally optimistic on the biotech. Four in coverage call AZN a “strong buy,” while just two say “hold” or worse. Meanwhile, the consensus 12-month price target of $53.05 is a 19% premium to current levels.
While overall volume is light, options traders have also been bullish. In the past 10-days, 2.52 calls have been picked up for every put at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). That being said, options look like a good way to speculate on AZN’s next move. The stock’s Schaeffer’s Volatility Index (SVI) of 30% sits higher than just 20% of all other readings from the past year, meaning options players are pricing in relatively low volatility expectations for AstraZenica right now.