Abivax (ABVX) Surges 7.93% Amid Acquisition Rumors and Bullish Technicals – What’s Fueling This Biotech Rally?

Summary
• Abivax (ABVX) surges 7.93% to $137.64, nearing 52-week high of $138.49
• Barclays speculates on potential acquisition by Eli Lilly or Johnson & Johnson
• Technicals show short-term bullish momentum with RSI at 62.7 and MACD divergence

Abivax’s explosive intraday rally has captured market attention, driven by a mix of speculative acquisition chatter and robust technical indicators. The stock’s 7.93% surge to $137.64—just $0.85 shy of its 52-week high—reflects heightened investor optimism. With Barclays flagging Lilly and J&J as potential suitors and technicals hinting at sustained momentum, this biotech name is now a focal point for traders and investors alike.

Barclays Speculation Ignites Biotech Spark
Barclays’ recent analysis has ignited speculation that Eli Lilly or Johnson & Johnson could pursue Abivax, citing obefazimod’s strong clinical profile for inflammatory bowel disease. While no official bids exist, the firm’s assessment of a potential $9–10 billion acquisition price—near Abivax’s current valuation—has stoked demand. This narrative, combined with the stock’s proximity to its 52-week high, has created a self-fulfilling prophecy as traders position for a potential bid. Technicals reinforce the move: a bullish RSI (62.7) and a MACD histogram (-0.42) suggest momentum is intact despite a slight bearish divergence.

Biotech Sector Gains Momentum as Eli Lilly Surges 3.54%
The biotech sector has rallied alongside Abivax, with Eli Lilly (LLY) surging 3.54% as a sector leader. Lilly’s strength, driven by its Trump-era diabetes drug deals and a $10 billion Metsera acquisition, underscores the sector’s focus on high-impact therapeutics. Abivax’s 7.93% gain outpaces the sector’s broader move, reflecting its speculative edge. While Lilly’s fundamentals anchor the sector, Abivax’s volatility and acquisition chatter position it as a high-risk, high-reward play.

Options and ETFs for Capitalizing on ABVX’s Volatility
• 200-day average: $48.37 (far below), RSI: 62.7 (neutral), Bollinger Bands: $101.34–$132.47 (near upper band)
• 30D MA: $112.17, 100D MA: $89.79 (both below current price)
• MACD: 4.86 (bullish), Signal Line: 5.27 (bearish divergence), Histogram: -0.42

Abivax’s technicals suggest a continuation of its short-term bullish trend, with key support at $101.34 and resistance at $132.47. The stock’s proximity to its 52-week high and elevated implied volatility (160–167%) make it a prime candidate for options plays. Two top options from the chain stand out:

• ABVX20251219C130 (Call, $130 strike, 12/19 expiry):
- IV: 160.40% (extreme volatility)
- Delta: 0.62 (moderate sensitivity)
- Theta: -1.04 (rapid time decay)
- Gamma: 0.011 (high sensitivity to price swings)
- Turnover: $59,964 (liquid)
- Leverage: 8.13% (high)
- Payoff (5% upside to $144.52): $4.52/share
- This contract offers aggressive upside with high leverage, ideal for traders betting on a near-term bid.

• ABVX20251219C135 (Call, $135 strike, 12/19 expiry):
- IV: 167.70% (extreme)
- Delta: 0.57 (moderate)
- Theta: -1.07 (rapid decay)
- Gamma: 0.011 (high sensitivity)
- Turnover: $54,313 (liquid)
- Leverage: 9.15% (high)
- Payoff (5% upside to $144.52): $9.52/share
- A slightly out-of-the-money call with higher implied volatility, offering amplified returns if the stock breaks $135.

Aggressive bulls may consider ABVX20251219C135 into a breakout above $135, while ABVX20251219C130 suits those seeking immediate leverage.

Backtest Abivax Stock Performance
The backtest of ABVX's performance after an 8% intraday surge from 2022 to the present shows favorable results. The 3-Day win rate is 57.85%, the 10-Day win rate is 58.24%, and the 30-Day win rate is 64.37%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 25.44%, which occurred on day 59, suggesting that ABVX can deliver significant gains following the 8% surge.

ABVX’s Rally Nears 52-Week High – Position for Next Move
Abivax’s 7.93% surge reflects a perfect storm of speculative acquisition chatter and technical momentum. While the stock’s proximity to its 52-week high ($138.49) and elevated IV suggest a potential short-term peak, the MACD divergence and RSI neutrality hint at caution. Traders should monitor the $135–$138 range for confirmation of a bid or consolidation. With Eli Lilly (LLY) surging 3.54% as a sector leader, biotech investors may find ABVX’s volatility a compelling play—if they’re willing to ride the edge of a potential acquisition frenzy.