Bausch Health Surges 12% on Paulson Capital's Strategic Stake Expansion – What's Fueling This Rally?

Summary
• Paulson Capital Inc. acquires 34.7M shares from Carl Icahn's group, boosting ownership to 19.13%
• Icahn Group's board seats vacated as director agreement terminates
• BHC trades at 12.18% gain, hitting $8.425 after opening at $7.95

Bausch Health (BHC) has surged over 12% intraday, fueled by Paulson Capital's aggressive stake acquisition and strategic board reshuffling. The stock's sharp rebound from $7.66 to $8.68 reflects renewed institutional confidence amid sector volatility. With the Drug Manufacturers - Specialty & Generic sector mixed, investors are dissecting whether this momentum is a catalyst-driven breakout or a short-term anomaly.

Paulson's Strategic Entry Ignites Institutional Optimism
The 12.18% intraday surge in BHC is directly tied to Paulson Capital's acquisition of Carl Icahn's 34.7M share position, elevating its ownership to 19.13%. This move signals a strategic repositioning by John Paulson, who emphasized confidence in Bausch Health's value creation and Bausch + Lomb's growth potential. The termination of Icahn's director agreement and subsequent resignation of Brett Icahn and Steven Miller from the board further de-escalated governance risks, allowing institutional buyers to capitalize on the perceived undervaluation. The stock's 52-week high of $9.85 remains a psychological hurdle, but the current momentum suggests a short-term reversal from its 52-week low of $4.25.

Drug Manufacturers Sector Mixed as Viatris Drags
The Drug Manufacturers - Specialty & Generic sector showed divergent performance, with Viatris (VTRS) declining 0.89% despite BHC's rally. While BHC's 12.18% gain outperformed the sector's 2.06% intraday return, the broader industry remains under pressure from regulatory scrutiny and pricing pressures. VTRS's -0.89% move highlights the sector's vulnerability to macroeconomic factors, contrasting with BHC's institutional-driven optimism.

Options Playbook: Capitalizing on BHC's Volatility
• 200-day MA: $6.69 (below current price) • RSI: 60.63 (neutral) • MACD: 0.164 (bullish) • Bollinger Bands: $5.33–$7.50 (current price above upper band)

BHC's technicals suggest a short-term bullish trend with long-term consolidation. Key levels to watch: 200D MA at $6.69 (support) and 52W high at $9.85 (resistance). The 30D RSI at 60.63 indicates balanced momentum, while the MACD histogram at 0.123 confirms positive divergence. The 200D Bollinger Band upper bound at $7.50 has been decisively breached, signaling potential continuation.

Top Options Contracts:
• BHC20250822C8.5
- Call Option, Strike: $8.50, Expiry: 2025-08-22
- IV: 56.99% (moderate), Leverage: 33.68%, Delta: 0.476 (moderate), Theta: -0.0378 (high decay), Gamma: 0.5606 (high sensitivity), Turnover: 7,741
- Payoff at 5% upside (ST=$8.85): $0.35/share (33.68% leverage amplifies returns)
- This contract balances moderate delta with high gamma, ideal for capitalizing on continued upward momentum while managing time decay.
• BHC20250822C9
- Call Option, Strike: $9.00, Expiry: 2025-08-22
- IV: 66.68% (high), Leverage: 64.77%, Delta: 0.269 (low), Theta: -0.0286 (moderate decay), Gamma: 0.3970 (moderate sensitivity), Turnover: 11,912
- Payoff at 5% upside (ST=$8.85): $0.00 (out-of-the-money), but high leverage (64.77%) offers explosive potential if the stock breaks $9.00.
- Aggressive bulls should consider this as a high-risk, high-reward play on a breakout above $9.00.

Action: Aggressive bulls may consider BHC20250822C9 into a break above $9.00. Conservative traders should target BHC20250822C8.5 for a measured rally.

Backtest Bausch Health Stock Performance
The backtest of Berkshire Hathaway (BHC) after an intraday surge of 12% shows favorable short-to-medium-term performance. The 3-Day win rate is 49.13%, the 10-Day win rate is 50.52%, and the 30-Day win rate is 50.00%, indicating a higher probability of positive returns in the immediate aftermath of the surge. The maximum return during the backtest period was 1.55%, which occurred on day 58 after the surge, suggesting that while the stock tended to rise in the short term, the overall maximum return was relatively modest.

BHC's Momentum Faces Crucial Test – Act Now
Bausch Health's 12.18% surge is a catalyst-driven breakout, but sustainability depends on maintaining above $8.50 and outperforming the sector. The 52W high at $9.85 remains a critical target, with Viatris (VTRS) down 0.89% serving as a sector benchmark. Investors should monitor Paulson Capital's next moves and institutional buying patterns. Act now: Buy BHC20250822C8.5 for a measured rally or BHC20250822C9 for a breakout play. Watch for a breakdown below $7.50 to trigger profit-taking.