Immunovant Plunges 7.64%, Is This a Buying Opportunity or a Warning Sign?

Summary
• Immunovant (IMVT) trades at $16.92, down 7.64% from its previous close of $18.32
• Analysts remain bullish with a Zacks Rank #2 (Buy) and a 137.7% upside price target
• Options volatility spikes, with the IMVT20250815C17 call option trading at 66.85% implied volatility
• Sector leader Regeneron (REGN) dips 0.75% as biotech stocks face mixed momentum

Immunovant’s sharp intraday decline has sparked urgency among traders, with the stock trading at its lowest level since July 10. The move follows a flurry of analyst upgrades and positive clinical data for its lead asset, IMVT-1402. However, the market appears to be recalibrating after a $16.32 opening and a $15.31 intraday low. With $10.05 million in turnover and a 1.47% turnover rate, the sell-off reflects a tug-of-war between bearish short-term positioning and long-term optimism about the company’s pipeline.

Capital Flight Amid Equity Offering and Analyst Optimism
The $16.92 price point reflects a sharp capitulation driven by a Morgan Stanley-led equity offering and conflicting analyst signals. While Zacks and LifeSci Capital maintain 'Buy' ratings with $50 price targets, the market has reacted to the dilutive impact of the offering. Additionally, Goldman Sachs’ recent 'Hold' rating at $18.00 has created a psychological barrier. Short-term traders are likely unwinding long positions as the stock tests key support levels near $16.15, with the 30-day moving average at $16.82 acting as a critical line in the sand.

Biotech Sector Mixed as Regeneron Drags, Immunovant Dips
Options Volatility and ETF Strategy in a Volatile Playbook
• 200-day MA: $21.10 (well below) | RSI: 61.55 (neutral) | MACD: 0.618 (bullish) | Bollinger Bands: $15.68–$19.03
• Key support: $16.15 (30D volume cluster), resistance: $17.35 (middle Bollinger Band)
• Short-term outlook: Range-bound with 3.47% daily volatility; watch for a break below $16.15

Top Options Contracts:
• IMVT20250815C17 (Call):
- Strike: $17 | Expiry: Aug 15 | IV: 66.85% | Delta: 0.52 | Theta: -0.0408 | Gamma: 0.1435 | Turnover: 216
- IV: High volatility for directional bias | Delta: Moderate sensitivity to price moves | Theta: Accelerated time decay | Gamma: Strong responsiveness to volatility shifts
- Rationale: This call option offers a 15.65% leverage ratio with a 46% price drop already priced in. A 5% rebound to $17.77 would yield a 4.5% profit (payoff: $0.77).

• IMVT20250919P15 (Put):
- Strike: $15 | Expiry: Sep 19 | IV: 88.69% | Delta: -0.296 | Theta: -0.013 | Gamma: 0.0584 | Turnover: 1,350
- IV: Elevated volatility for downside protection | Delta: Low directional exposure | Theta: Slower time decay | Gamma: Moderate sensitivity to price swings
- Rationale: This put offers a 12.52% leverage ratio with 88% implied volatility. A 5% drop to $16.07 would yield a 6.5% profit (payoff: $0.93).

Trading Setup: Aggressive bulls should consider the IMVT20250815C17 for a 4–6% rebound trade above $17.35, while bears may short the IMVT20250919P15 for a breakdown below $16.15. With $10.05 million in turnover and a 1.47% turnover rate, liquidity is sufficient for entry/exit. The RSI at 61.55 suggests a neutral zone, but the MACD at 0.618 favors a short-term bullish bias.

Backtest Immunovant Stock Performance
The backtest of IMVT's performance after an intraday plunge of -8% shows favorable short-to-medium-term gains. The 3-Day win rate is 51.30%, the 10-Day win rate is 51.46%, and the 30-Day win rate is 48.70%. This indicates that following such a significant dip, the stock tends to exhibit positive returns over various time frames, with a maximum return of 3.49% observed within 53 days.

IMVT at Crossroads: Play the Breakout or the Breakdown?
Immunovant’s $16.92 level sits at a psychological inflection point, with the 30-day support at $16.15 and 200-day resistance at $21.10 creating a binary scenario. Analysts remain bullish, but the market is pricing in skepticism via the 137.7% price target versus the 52-week low of $12.72. Watch the sector leader Regeneron (REGN) at -0.75% for directional clues. If IMVT breaks $16.15, the $15.68 Bollinger support becomes critical; a hold above $16.82 could reinvigorate the 61.55 RSI into overbought territory. Traders: Short-termers target the $17.35 pivot, while long-termers hold for the $18.00 Goldman Sachs target.