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PreMarket Prep Stock Of The Day: Cassava Sciences

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PreMarket Prep Stock Of The Day: Cassava Sciences

Of the stocks with volatile price action this week, perhaps the wildest has been Cassava Sciences Inc. (NASDAQ: SAVA) — the PreMarket Prep Stock of the Day.

The Company: Cassava Sciences Inc is a clinical-stage biotechnology company engaged in developing a scientific approach for the treatment and detection of Alzheimer's disease.

It is also developing an experimental biomarker diagnostic, PTI-125, to detect Alzheimer's disease with the help of a blood test.

Cassava's January Price Action: The issue, which ended 2020 at $6.82, had a great January, climbing to $19.92. 

The rally continued into February, with the stock climbing to $22.29 on Monday. And it was just getting started. 

The Cassava Catalyst: On Tuesday, the company announced the results of an interim analysis from an open-label study of simufilam, its lead drug candidate for the treatment of Alzheimer's disease.

"Patients' cognition and behavior scores both improved following six months of simufilam treatment, with no safety issues," according to Cassava. 

The news that the company now may be a leader in the treatment of Alzheimer’s disease created a buying frenzy in the issue, with the stock more than doubling from $22.99 to $55.33 on much higher-than-average volume.

The momentum spilled over into Wednesday's session, with the issue reaching $90 before retreating to end the session at $87.96.

Blow-Off Top? In the less liquid premarket trading session Thursday, aggressive buyers pushed the issue to $138.50 before profit-takers came into the issue and.It backed off that level. 

The issue still managed to open in the triple digits and made an attempt to reach the premarket high, but came up well shy, only reaching $117.54 before sharply reversing course. 

The sharp selloff from that high nearly cut the price in half. The stock closed Thursday's session down 27.88% at $63.43. 

Cassava Moving Forward: The issue could go anywhere from here. Keep in mind that plenty of investors are still sitting on some hefty gains and may ring the register at any moment. 

Based on the daily charts, the next low comes in at Wednesday’s low ($59.50).

On the upside, some investors may focus on Wednesday’s all-time closing high price ($87.95) as a potential exit on a rebound.

 

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