Will The Rally In Editas Stock Continue After A 20% Rise In A Month?
The stock price of Editas Medicine (NASDAQ: EDIT), a biotechnology company focused on developing treatments using gene editing technology, has seen a rise of over 20% over the last twenty-one trading days, and it is also up a solid 46% over the last ten trading days. The recent rise can be attributed to a wider rally in gene-editing stocks, after Intellia reported positive clinical data supporting precision editing of a disease-causing gene inside the body. This led to a bullish sentiment for multiple gene editing stocks, including Editas. Furthermore, there are reports of Moderna looking to acquire a gene-editing company to widen its portfolio of drugs. [1]
But now that EDIT stock has moved 20% over the last month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is an equal chance of a rise or a fall in EDIT stock over the next month. Out of 201 instances in the last six years that EDIT stock saw a twenty-one day rise of 20% or more, 102 of them resulted in EDIT stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 102 out of 201, or about 51% chance of a rise in EDIT stock over the coming month. See our analysis on Editas Medicine Stock Chances of A Rise for more details.
Although there is an equal chance of a rise or a fall for EDIT based on its historical performance, given the momentum in gene-editing stocks, hopes of an acquisition target, as well as a rise in number of clinical trials, these suggest that EDIT stock may continue to trend higher in the near term.
Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data
- After moving 40% or more over a five-day period, the stock rose in the next five days on 57% of the occasions.
- After moving 46% or more over a ten-day period, the stock rose in the next ten days on 64% of the occasions
- After moving 20% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 51% of the occasions.
Predict average return on Editas Medicine (EDIT) Stock Return: AI Predicts EDIT Average and Excess Return After a Fall or Rise
Editas Medicine (EDIT) Stock Return (Recent) Comparison With Peers
- Five-Day Return: EDIT highest at 40%; BLUE lowest at -29%
- Ten-Day Return: EDIT highest at 46%; BLUE lowest at -31%
- Twenty-One Days Return: EDIT highest at 20%; BLUE lowest at -41%
Going by historical performance, while EDIT stock can move in either direction, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Pfizer vs Merck.
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Notes:
- Gene-editing stocks jump on Intellia and CRISPR trial updates, Mark P, Aug 6, 2021, The Street [↩]