Biotech Stock Could Turn 4-Year Peak Into Records

BridgeBio Pharma Inc (NASDAQ:BBIO) stock is up 3.3% to trade at $70.36 at last check, and earlier hit a fresh four-year high $70.60 on a bounce off its 20-day moving average. Though the security sports a 154.9% year-over-year lead, its recent rally may be far from over, as it's also flashing a historically bullish signal that could send it soaring to a new peak.

More specifically, BridgeBio Pharma stock's recent peak comes amid low implied volatility (IV), per its Schaeffer's Volatility Index (SVI) of 44%, which ranks in the 13th percentile of its annual range. This has occurred six other times over the last five years, after which BBIO was was higher one month later 50% of the time, averaging a massive 7.6% gain. From its current perch, a similar move would place the security at $75.60 -- a new record high.

An unwinding of pessimism in the options pits could keep the shares surging. This is per BBIO's 50-day put/call volume ratio of 1.03 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 93% of annual readings. Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.52 stands higher than all other readings form the last 12 months.

A short squeeze could keep winds at BridgeBio Pharma stock's back. Short interest added 12.8% in the most recent reporting period, and now makes up 11.8% of BBIO's available float. It would take short sellers more than eight days to buy back their bearish bets, at the stock's average pace of trading.