What's Up With The Delayed Reaction In Aveo Pharmaceuticals?
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.
AVEO Pharmaceuticals, Inc. (NASDAQ: AVEO) shares were trading higher by $1.36 (80 percent) at $2.96 in Thursday's session. The catalyst for the issue doubling in price is favorable results of its TIVO-1 extension study for the treatment of advanced renal cell carcinoma (RCC).
Strangely, that news hit the wires on Wednesday at 7:00 a.m. ET and only instigated a modest rally in the issue from $1.34 to $1.60. The Street's attention led to the substantial boost in volume as it traded 4.37 million shares compared with its day average of 200-day average of 984,000.
On Thursday, The rise on huge volume may have appeared on scanners across the globe, as well as catching the eye of momentum traders. As a result, after a higher open ($1.84 versus Wednesday's close of $1.60), and a measly $0.03 retreat, it exploded to $3.50. Since reaching that elevated level it has retreated under $3.
The issue is now trading in a vacuum area that was created in May 2013, when it cascaded from $7.54 to $2.52 in one week when a class action lawsuit was filed against the company for alleged violations federal securities laws.
Even more impressive than price increase is the volume so far: a whopping 55 million shares have changed hands with over four hours remaining in the session.
Editor's note: At time of publication, shares were trading at $2.46.
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