Shares in pharmaceutical small-cap Peregrine Pharmaceutricals (PPHM) were soaring Wednesday without a clear indication as to what was driving either the heavy volume or the major price jump. The stock opened at $1.99 a share, just 3.6 percent higher than Tuesday’s close, and then quickly took off on heavy volume, rising to over $2.30 a share by 10 am. Volume was over 15 million shares by 1 pm, more than 5 times the daily average.
The only specific news item that could be motivating this major move is the announcement on Tuesday that the company would be presenting data from three preclinical studies demonstrating the immuno-oncology and anti-viral potential of phosphatidylserine (PS)-targeting antibodies at the two Keystone Symposia to be held March 9-13, 2014.
The company began making gains in 2014 after the announcement that the FDA gave fast track designation to Peregrine’s lead therapy, Bavituximab, for treatment of lung cancer.
The move for Peregrine resulted in the stock crashing through two different rising resistance levels. Both were set by a Jan. 22 spike that briefly took shares over $2 apiece before retreating, but one uses a $1.83 a share close from May 20 and features a much more gradual increase while the other begins with an Oct. 4 spike to $1.48 a share and has a much sharper incline.
Regardless of which resistance line investors were watching, Peregrine moved well north of it as share prices leapt to a 52-week high by the closing bell, at $2.40 apiece. And the day’s gains push Peregrine into overbought territory when considering a number of key technical factors like RSI or Bollinger Bands.
While it seems at this point that any attempt to explain the size and volume of the day’s move would be entirely speculative, it does have the look of a classic short squeeze. The timing of this new enthusiasm makes it impossible to ignore the announcement of the presentation at the Keystone Symposia, making one assume that investors and traders are anticipating big news that will drive the stock higher. That could be acting as a catalyst that sparked a short squeeze that has shorts running for the hills on Wednesday.
However, such speculation would have to be tempered by the fact that the short float remains relatively low, at just over 6.75 percent of shares heading into Wednesday.
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