Micro-cap developer of novel brachytherapy technology IsoRay (ISR) shot up over 30 percent on Wednesday following publication of a peer-reviewed study showing improved results in treating gynecological cancers by the company’s lead therapy.
Shares opened at $2.22 apiece with the opening bell, gapping up nearly 20 percent. Gains continued throughout the morning, reaching an intraday high of $2.61 a share just after 10 am. As the day wore on, though, shares retreated under $2.50 apiece.
Volume remains very heavy despite a relatively small float. Heading into the final hour of trading, the stock had traded nearly 20 million shares. While this isn’t a huge increase over its daily average of 16.12 million shares, it’s still a huge portion of the company’s 53.99 million share float. In this case, the majority of the day’s volume came during the first hour of trading.
The success of IsoRay’s technology in its first major peer-reviewed study helped spark the day’s run for what has quickly become a notoriously volatile stock.
"We are very excited to have our Cesium-131 isotope seeds chosen for use in the treatment of gynecologic cancers,” said CEO Dwight Babcock. “We believe our marketing is most successful by teaming up with medical industry thought leaders as they seek better solutions and outcomes for their patients. As we continue to develop our product offerings internally with support from industry leaders, our message is clear and the medical community is becoming increasingly aware of the innovative alternative our Cesium-131 products offer to cancer patients."
Brachytherapy, also known as internal radiotherapy or sealed source radiotherapy, involves implanting devices that provide a targeted dose of radiation to tumors. Among its potential benefits over other forms of radiotherapy include more focused radiation exposure for cancer cells, a shorter course of treatment with fewer visits, and that it can be performed as an outpatient procedure.
IsoRay’s therapy involves the novel use of cesium-131 isotopes in creating its “seeds,” the tiny metal rods implanted in the patients.
IsoRay’s stock has been experiencing some wild action for weeks, displaying the sort of volatility that’s typical of the small-cap market. The stock exploded in late March, pulled back some after the company took advantage of its new valuation with a public offering, bounced back again to its previous highs, then settled into a steady decline from its peak.
IsoRay’s big swings and heavy volume mean it’s undoubtedly on the radar for any number of traders, so while the big move has a clear motivation in the publication of the study, there are some clear technical factors that are likely helping define some of the trading action.
Prior to today’s catalyst, the stock had been showing signs that its steady decline that started in the second week of April had started to push the stock into oversold territory. The decline itself appears to have been a reaction to some signs that the enthusiasm surrounding IsoRay was in decline as the 14-day RSI pushed past 70.0 into overbought territory at the start of April and then the MACD line crossed the signal line from above on April 9.
However, that same move pushed the 14-day stochastic RSI under 0.20 into oversold territory, and the stock has stayed below that level since April 9 until today’s jump.
What’s more, yesterday’s closing price of $1.86 was significant in two ways. First, it meant that the stock had hit a downward sloping support level at the same time it was reaching the 50-day SMA from above. Secondly, it had the stock’s price touching the bottom Bollinger Band, another clear sign that the price for IsoRay could be very low.
So, the study results may have been injected into a situation where traders were already looking for a reason for IsoRay to pop and creating precisely the sort of situation that would be appealing to anyone seeking out a solid momentum play, something that the run-up following the opening bell might indicate.
It is also interesting to note, though, that the day’s gains also appeared to be capped by the stock’s 20-day SMA at $2.57 a share. While briefly crossing over that level, the stock quickly pulled back and traded near that level but consistently below it for the remainder of the day.
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