Caris Life Sciences Plummets 5.75%: What's Fueling the Selloff?

Summary
• Caris Life Sciences (CAI) trades at $36.18, down 5.75% from its $38.39 previous close
• Intraday range spans $35.84–$38.68, signaling sharp volatility
• RSI at 75.34 suggests overbought conditions amid downward momentum

Caris Life Sciences is experiencing a dramatic intraday selloff, with its stock price collapsing nearly 5.8% as of 7:44 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 UnitedHealth Group (UNH) barely down 0.03%, the decline appears disconnected from broader healthcare sector dynamics. Traders are now scrutinizing technical indicators and options activity for clues.

Technical Overbought Conditions Trigger Profit-Taking
The sharp 5.75% 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.

Biotechnology Sector Mixed as Thermo Fisher (TMO) Drives Weakness
The biotechnology sector remains under pressure, with sector leader Thermo Fisher (TMO) down 1.39%. While CAI’s selloff appears disconnected from broader sector dynamics, the decline in TMO and other peers like Illumina (-3.81%) reflects broader risk-off sentiment. However, CAI’s intraday volatility is more attributable to technical overbought conditions than sector-wide trends.

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: 0.356% (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: 70.73% (high volatility)
• Leverage: 12.40% (amplifies gains/losses)
• Delta: 0.6204 (moderate sensitivity)
• Theta: -0.1060 (rapid time decay)
• Gamma: 0.0669 (high sensitivity to price acceleration)
• Turnover: 4,212

This contract stands out due to its high leverage ratio (12.40%) and gamma (0.0669), 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: 67.58% (balanced volatility)
• Leverage: 17.16% (strong amplification)
• Delta: 0.3921 (moderate directional sensitivity)
• Theta: -0.0474 (moderate time decay)
• Gamma: 0.0442 (responsive to price shifts)
• Turnover: 3,366

This option offers a balanced approach with 17.16% leverage and 0.0442 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 Thermo Fisher (-1.39%). 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.