Caris Life Sciences Plummets 5.38%: Overbought Conditions and Sector Jitters Spark Intraday Selloff

Summary
• Caris Life Sciences (CAI) trades at $36.325, down 5.38% from its $38.39 previous close
• Intraday range spans $35.84–$38.68, reflecting sharp volatility
• RSI at 75.34 and MACD histogram narrowing signal waning bullish momentum

Caris Life Sciences is experiencing a dramatic intraday selloff, with its stock price collapsing nearly 5.4% as of 6:35 PM ET. The move has pushed the stock closer to its 52-week low of $25.40, despite a short-term bullish K-line pattern. With sector leader Illumina (ILMN) down 3.32%, the decline appears tied to broader biotech sector jitters. Traders are now scrutinizing technical indicators and options activity for clues.

Technical Overbought Conditions Trigger Profit-Taking
The sharp 5.38% decline in Caris Life Sciences is primarily driven by technical overbought conditions. The RSI at 75.34—a level typically signaling exhaustion for upward momentum—has triggered algorithmic and discretionary selling. Additionally, the MACD histogram (0.19) shows a narrowing bullish divergence, suggesting waning conviction in the short-term bullish trend. The stock’s price action has also broken below the 30-day moving average of $32.75, intensifying bearish pressure as traders react to the breakdown.

Biotech Sector Jitters Amplify CAI's Decline
The biotech sector is under pressure, with sector leader Illumina (ILMN) down 3.32% and peers like Thermo Fisher (TMO) dipping 1.53%. While UnitedHealth Group (UNH) remains relatively stable at -0.03%, the broader sector’s mixed momentum underscores a risk-off environment. CAI’s decline aligns with sector-wide profit-taking, though its technical overbought conditions amplify the selloff.

Capitalizing on Volatility with CAI20250919C35 and CAI20251017C40
• RSI: 75.34 (overbought) • MACD: 2.48 (bullish) • Bollinger Bands: $42.42 (upper) / $34.73 (middle) / $27.04 (lower) • 30D MA: $32.75 (below current price) • Turnover Rate: 0.2167% (moderate)

Caris Life Sciences is at a critical technical crossroads. The RSI’s overbought reading and MACD’s weak histogram suggest a high probability of continuation in the downward move. Key support levels at $35 (30D MA) and $34.73 (Bollinger middle) are critical to monitor. For short-term traders, the CAI20250919C35 and CAI20251017C40 options offer compelling risk/reward profiles.

CAI20250919C35 Call Option
• Code: CAI20250919C35 • Type: Call • Strike: $35 • Expiry: 2025-09-19 • IV: 64.68% (high volatility) • Leverage: 12.50% • Delta: 0.6468 (moderate sensitivity) • Theta: -0.1027 (rapid time decay) • Gamma: 0.0709 (high sensitivity to price acceleration) • Turnover: 4212
• IV: High volatility suggests strong price swings • Leverage: Amplifies gains/losses • Delta: Moderate sensitivity to price moves • Theta: Rapid time decay • Gamma: High sensitivity to price acceleration
This contract stands out due to its high leverage ratio (12.50%) and gamma (0.0709), making it ideal for aggressive bulls expecting a rebound above $35. A 5% downside scenario (to $34.82) would result in a call payoff of $0.82, but the high gamma ensures rapid response to price reversals.

CAI20251017C40 Call Option
• Code: CAI20251017C40 • Type: Call • Strike: $40 • Expiry: 2025-10-17 • IV: 71.24% (balanced volatility) • Leverage: 15.14% (strong amplification) • Delta: 0.4146 (moderate directional sensitivity) • Theta: -0.0508 (moderate time decay) • Gamma: 0.0422 (responsive to price shifts) • Turnover: 3155
• IV: Balanced volatility • Leverage: Strong amplification • Delta: Moderate directional sensitivity • Theta: Moderate time decay • Gamma: Responsive to price shifts
This option offers a balanced approach with 15.14% leverage and 0.0422 gamma, suitable for traders anticipating a mid-term rebound. A 5% downside to $34.82 would yield a payoff of $0.00, but the high gamma ensures it gains value if CAI breaks above $40.

Trading Hook: Aggressive bulls may consider CAI20250919C35 into a bounce above $35, while CAI20251017C40 offers a safer play for a mid-term rebound.

Backtest Caris Life Sciences Stock Performance

Act Now: Position for a Volatile Rebound or Defend Against Further Downtrend
Caris Life Sciences is at a pivotal technical juncture, with overbought conditions and a weakening MACD histogram pointing to potential continuation of the selloff. Traders should closely monitor the $35 support level and the sector leader Illumina (-3.32%). A breakdown below $34.73 could trigger a test of the 52-week low at $25.40, while a rebound above $38.32 (30D resistance) may reignite bullish momentum. For immediate action, consider CAI20250919C35 for aggressive upside potential or CAI20251017C40 for a more conservative mid-term play. Watch for $35 breakdown or regulatory reaction.