PreMarket Prep Stock Of The Day: Sorrento Therapeutics

This deep into the pandemic, positive vaccine or testing-related news doesn't always elicit the same type of reaction as in the early stages of the virus. A good example of this is the price action in Sorrento Therapeutics Inc. SRNE, which is the PreMarket Prep Stock Of The Day.

The Company: Sorrento Therapeutics is a biotechnology company focused on the development of novel immunotherapies for oncology and autoimmune/inflammation diseases. The product portfolio consists of BioSimilar/BioBetter antibodies, CAR-T programs for the treatment of solid tumors, adoptive cellular therapies, immuno-oncology mAbs, and antibody-drug conjugates.

Not A Good Year: After ending 2020 at $6.83, the issue more than doubled when it peaked in February at $17.25. Since reaching that elevated level, it has traded lower in nine of the 11 months.

It finally found a bottom on Dec. 6 ($4.69) and the high of the rebound was made on Dec. 9 at $6.53. Since reaching that peak, it has drifted lower and ended last week at $5.73.

The News: Before the opening bell, the company announced the COVISTIX COVID-19 virus rapid antigen detection test. The COVISTIX test maintains its ability to detect the omicron variant, in addition to detecting SARS-CoV-2 and all of its major variants of concern. The company believes it has the potential to be a "Best-in-Class" rapid COVID-19 virus antigen detection test.

PreMarket Price Action: When the news hit the wires, the issue had an immediate move higher from Friday's close ($5.73) to $5.98 and reversed course. That high came in just above its high from last Tuesday, and just shy of the high for last week at $6.10. In addition, it's not even close to the high for the recent rebound at $6.53.

Price Action Off Open: After a higher open, the stock found sellers ahead of the premarket high only reaching $5.92 and reversed course. As of 11 a.m. EST, the ensuing decline has found support ahead of Friday’s low ($5.60) and is attempting to rebound.

Moving Forward: Bulls should be concerned that with a new positive catalyst, it's still trading flat on the session. That reveals some overhead supply in the issue as most investors that are down are looking to mitigate their losses.

Along these lines, any shorter-term investors that have been accumulating the issue on weakness are looking to maximize the profits from the unexpected and short-lived rally.

On the positive side, the issue has made a series of nine consecutive lows from $5.54-$5.87, which may be a sign of longer-term buying interest.