When Bristol-Myers reported back on August 5 that Opdivo did not meet its targets for treatment of advanced non-small cell lung cancer, the stock tanked 16 percent. Merck stock, on the other hand spiked 10.4 percent on the news as investors speculated that the company’s rival drug Keytruda could be the big winner.
However, the stock’s performances have continued to mirror each other ever since, as PreMarket Prep’s Dennis Dick pointed out on Twitter.
One likely explanation is that a number of traders have been pair trading the stocks ever since the Opdivo news came out. For Now, Bristol-Myers seems to have found some support at the $60 level, but a breakout below $60 would likely push the stock to test the $55-58 level where it found support in late 2015 and early 2016. A Bristol-Myers breakdown could also trigger…
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