MEIP Soars Over 23%—What’s Driving the Breakout?

• MEIP surges 23.1% to $3.78, hitting an intraday high of $3.85
• Outperforms sector leader AMGN (+1.9%), while trading near 52-week high of $4.10
• Call option MEIP250718C00005000 spikes 100%, signaling bullish bets

The sharp rally in MEI Pharma’s shares has outpaced broader biotech gains, fueled by options activity and sector tailwinds. With the stock breaking above $3.07’s close, traders are watching for sustained momentum amid a bullish K-line pattern and overbought RSI.

Surge in Call Option Activity Sparks MEIP’s Rally
The stock’s dramatic 23% surge stems from abnormal activity in the MEIP250718C00005000 call option, which spiked 100% to $0.10 from its previous close of $0.05. This contract, expiring July 18 with a $5.00 strike, attracted speculative buying despite being out-of-the-money, signaling a bullish bet on a near-term price explosion. Technicals also played a role: the RSI hit 70.48—overbought territory—while the MACD crossed above its signal line, reinforcing short-term momentum.

Bullish Options Playbook: Capturing MEIP’s Momentum
• Technical Indicators:
- RSI: 70.48 (Overbought)
- Bollinger Bands: Above Upper Band ($3.05)
- MACD: 0.17 vs Signal Line 0.13 (Bullish Cross)
- 200-Day MA: $2.52 (Current Price $3.78 is 49% above)

Trading Setup: MEIP’s break above $3.12’s open confirms a bullish trend, targeting resistance at $4.10’s 52-week high. Traders should monitor support at $3.10 and $2.50. The options market highlights two contracts for aggressive plays:

1. MEIP20251219C5 (Call)
- Strike: $5.00 | Expiration: Dec 19, 2025
- IV: 20.01% | Leverage: 756%
- Delta: 0.027 | Gamma: 0.128 | Theta: -0.00013
- Why It Stands Out: Ultra-high leverage and gamma amplify gains if MEIP rallies past $5.00 by expiration, though theta’s minimal decay eases time risk.
- Payoff: At $4.00 (5% from $3.78), payoff is $0.00. Break-even at $5.00 requires a 32% jump—aggressive but possible in a biotech breakout.

2. MEIP20251219P2.5 (Put)
- Strike: $2.50 | Expiration: Dec 19, 2025
- IV: 32.45% | Leverage: 756%
- Delta: -0.016 | Gamma: 0.050 | Theta: -0.000085
- Why It Stands Out: A defensive play against a retracement, with gamma enhancing sensitivity to price drops below $3.00.
- Payoff: If MEIP retreats to $2.50, payoff is $0.50—250% of premium. Ideal for hedging long positions.

Hook: Bulls aiming for a sustained breakout may layer MEIP20251219C5 into a $3.80+ push, while bears should watch $3.10 support for reversal signals.

Backtest MEI Pharma Stock Performance
The 23% intraday surge in MEIP has historically led to mixed short-to-medium-term performance. While the 3-Day win rate is 43.30%, the 10-Day win rate is slightly lower at 41.47%, and the 30-Day win rate is 46.61%, indicating a higher probability of positive returns in the immediate aftermath of such a surge. However, the average returns over these periods are negative, with a -0.43% 3-Day return, a -0.19% 10-Day return, and a 0.05% 30-Day return, suggesting that while there is a chance for gains, there is also a significant risk of erosion of those gains in the following days.

MEIP’s Momentum Faces Key Resistance—Watch for Sustained Breakout
MEI Pharma’s 23% surge hinges on whether the stock can sustain momentum above $3.80 and breach $4.10’s 52-week high. Technicals show overbought conditions, but strong options activity and a bullish K-line suggest bulls still dominate. Sector leader AMGN’s 1.9% gain underscores broader biotech optimism, but MEIP’s outlier performance requires close watch for catalysts like regulatory updates or clinical trial news. Traders should prioritize MEIP20251219C5 for a $4.00+ rally or $3.10 breaks as key inflection points. Bottom line: This is a high-risk, high-reward setup—position size accordingly.