Cue Biopharma Soars 23%, but Can This Biotech Rally Hold?

• Cue Biopharma (CUE) surges 23.29% to $0.863, hitting a session high of $1.03
• Sector leader Amgen (AMGN) climbs 1.99%, but broader biotech news mixed with FDA approvals and trial failures
• Options activity spikes in out-of-the-money calls, signaling speculative bets despite bearish technicals

Cue Biopharma’s stock is burning brighter in a volatile biotech sector, surging nearly a quarter in a single session. The move outpaces its sector leader Amgen’s modest gain but faces headwinds from a bearish MACD crossover and resistance near $1. Analysts will watch whether this pop reflects broader biotech optimism—or a short-squeeze fueled by speculative options flow.

Speculative Momentum Overcomes Sector Mixed Signals
Cue’s surge lacks direct catalysts from its own operations, as the company has no recent trial updates or news in the provided data. Instead, the move likely reflects speculative cross-currents in the biotech sector. Investors may be latching onto bullish options activity—particularly in long-dated calls expiring in 2026—while sector peers like Eli Lilly (+$250M Purdue investment) and Teal Health (FDA HPV approval) generate positive headlines. However, offsetting negatives include Vir Biotechnology’s failed hepatitis B trial and Liposomal antibiotic research risks highlighted in Nature Biotechnology. The gap up from $0.70 suggests retail or momentum-driven buying, with the stock now testing resistance near its 200-day moving average ($1.04).

Bullish Options Spotlight: Leverage Calls Amid Bearish Technicals
CUE20260116C1 and CUE20251017C1 stand out as speculative plays:
• Technicals: RSI 47.26 (neutral), 200-day MA $1.04 (resistance), Bollinger Bands upper at $0.836
• Key Levels: $0.70 (support), $1.03 (near-term resistance)

Cue’s price is trapped between bearish MACD and short-term resistance. Aggressive bulls targeting a potential breakout could use:
1. CUE20260116C1 (Strike $1, Exp 2026-01-16):
- Delta 0.684 | Gamma 0.351 | Theta -0.0010 | IV 166.47%
- Turnover $3,690 (liquidity leader) | Leverage 2.44%
- Why? High gamma amplifies gains if $1.03 breaks, with theta erosion manageable over months
2. CUE20251017C1 (Strike $1, Exp 2025-10-17):
- Delta 0.608 | Gamma 0.512 | Theta -0.0017 | IV 173.11%
- Turnover $425 | Leverage 3.42%
- Why? Sharper gamma response for a quick $1.03-$1.20 rally, though shorter expiry accelerates theta decay

Payoff Example (5% upside to $0.906):
- CUE20260116C1 (Strike $1) would have zero intrinsic value, but its 0.68 delta means it could still gain ~30% from current $0.025 premium due to volatility compression
- Hook: "Bulls targeting $1.20? CUE20260116C1 offers 68% delta leverage with 6 months to expiration"
Technical traders should pair calls with a $0.70 stop—failure there risks a collapse back toward 52W lows ($0.45).

Backtest Cue Biopharma Stock Performance
The backtest of the CUE's performance after an intraday percentage change of more than 23% shows mixed results. While the 3-day win rate is high at 44.23%, the returns over longer periods such as 10 days and 30 days are negative, with a 10-day return of -0.37% and a 30-day return of -0.22%. This suggests that while the CUE may experience short-term gains, it is prone to giving up those gains in the medium to long term. The maximum return during the backtest period was only 0.17%, which occurred on day 46, indicating that even after a strong initial surge, the CUE's performance tends to taper off.

Buy the Rumor, Sell the News? CUE Faces Crucial Technical Tests
Cue’s explosive rally faces an uphill battle against bearish technicals and a sector struggling to sustain momentum. While options activity hints at bullish bets, the stock remains 18% below its 200-day average and faces resistance near $1.03. Investors should monitor AMGN’s 1.99% gain as a sector benchmark—if biotech leaders falter, CUE’s speculative surge could reverse sharply. Aggressive traders might layer in calls on dips toward $0.75, but a close below $0.70 would signal a return to bear market dynamics. Action: Watch $1.03 resistance and $0.70 support—break either and the next move becomes clear.