KaloBios Pharmaceuticals Inc (NASDAQ:KBIO) was a massive mover during Monday’s trading session. The stock surged by close to 117% on the back of 17 times the average daily volumes, considered a bullish sign. It is important to state that the stock has been trending higher ever since witnessing a breakout from a broad trading range, which is a huge positive. The relative strength index for the stock continues to trend in the overbought zone but show no sign of reversal, which is a sign of inherent strength. Traders believe the stock could head to levels of $41.50 in the near term.
KaloBios Pharmaceuticals Inc (NASDAQ:KBIO) has become the star stock of Wall Street after the shares of pharmaceutical company jumped more than 4000% in last six trading sessions. This surge in KaloBios shares can be attributed to a high-profile ex- hedge-fund manager who associated with a group of investors to acquire a majority stake in the company. In last trading session, KBIO jumped over 116% to close the day at $39.50. The gains came at a share volume of 17.04 million compared to average share volume of 1.46 million.
The momentum
The shares of KaloBios started their climb on November 16, 2015, when the stock plunged to 44 cents per share before jumping to $1.72 a share on trading volume of more than 3 million shares. For KaloBios, the trading volume was much more than trading volume recorded in the previous thirty-six trading sessions combined. The jump didn’t stop here as KBIO moved to $2.17 in the following session on even heavier trading volume of over 5 million shares.
The news
The upward movement of KaloBios stock on the chart came as a surprise for many of the investors, since the company had reported on November 13, 2015 that it was winding down its businesses. The company announced that it had been looking for strategic transactions, but those measures had yielded no results. Since the company had limited cash reserves left, it reported it had purchased in a restructuring company and would move all of its remaining staff in the coming months.
The clarity
The reason for the jump in KaloBios stock became evident on November 18, 2015. Martin Shkreli, the CEO of Turing Pharmaceuticals AG, was stated to be snapping up KBIO shares on November 16 and November 17, as per the filings with the SEC that came after the market hours. Also, on November 19, the company reported that it was not closing and Mr. Shkreli was KaloBios’ new CEO and chairman.
