CARM Plummets 17.6%: What's Behind the Sharp Drop in Biotech?

Summary
• CARISMA Therapeutics (CARM) slumps 17.66% to $0.3623, its lowest since March 2025
• Sector leader Amgen (AMGN) declines 1.32%, signaling broader biotech sector pressure
• RSI hits 71.51 (overbought), MACD turns negative as bearish momentum builds

Today’s plunge in CARM has sent shockwaves through the biotech sector, with the stock trading at its lowest level in months. The sharp decline follows a volatile session marked by heavy volume and a breakdown below key support levels. While no direct company-specific news triggered the move, technical indicators and sector dynamics suggest a confluence of profit-taking and broader market skepticism toward biotech valuations.

Short-Term Overbought Conditions Trigger Profit-Taking
The 17.66% intraday drop in CARM reflects a technical correction after a brief short-term bullish trend. With RSI at 71.51 (overbought) and MACD (-0.0153) crossing below the signal line (-0.0288), the stock faced immediate selling pressure. The breakdown below the 200-day moving average ($0.405) and the 30-day support zone ($0.224–$0.2285) accelerated the decline. While no direct company news was released, the absence of positive catalysts and the sector’s mixed performance (AMGN down 1.32%) created a perfect storm for a sharp reversal.

Biotech Sector Under Pressure as AMGN Drags
The broader biotech sector faces headwinds as Amgen (AMGN), the sector’s top performer, declines 1.32%. While CARM’s drop is more severe, the sector-wide sell-off reflects investor caution amid regulatory scrutiny and earnings volatility. Novartis’ $5B cardiovascular deal and Amgen’s clinical trial partnerships highlight sector innovation, but these developments haven’t offset the downward momentum in speculative biotech names like CARM.

Technical Analysis Drives Strategy Amid Volatility
• RSI: 71.51 (overbought) • MACD: -0.0153 (bearish crossover) • 200D MA: $0.405 (broken) • Bollinger Bands: Price at $0.3623 (near lower band) • Turnover Rate: 70.49% (high liquidity)

CARM’s technical profile suggests a short-term bearish setup. Key levels to watch include the 200-day moving average ($0.405) as resistance and the 30-day support zone ($0.224–$0.2285). With RSI overbought and MACD negative, aggressive traders may consider shorting near $0.3623 with a stop above $0.405. However, the long-term ranging pattern (52W high $1.27 vs. low $0.1417) suggests volatility could persist. The absence of options liquidity limits derivative strategies, but leveraged ETFs (if available) could mirror sector moves. For now, the focus remains on technical levels and sector sentiment.

Backtest CARISMA Therapeutics Stock Performance

Act Fast: CARM’s Breakdown Signals High-Risk Opportunity
CARM’s sharp decline underscores the fragility of speculative biotech stocks amid sector-wide uncertainty. With AMGN down 1.32% and technical indicators flashing bearish signals, the near-term outlook remains cautious. Investors should monitor the 200-day moving average ($0.405) as a critical resistance level—if broken, it could confirm a deeper correction. For those with a high-risk tolerance, short-term strategies near $0.3623 may offer potential, but the long-term ranging pattern suggests patience is key. Watch Amgen’s performance closely; if the sector leader stabilizes, it could provide a floor for CARM’s recovery.