Natera Plummets 7.8% Amid Biotech Sector Volatility: What’s Driving the Selloff?

Summary
• Natera (NTRA) plunges 7.78% to $234.6, erasing $20B in market value
• Collaboration with Exelixis for STELLAR-316 trial sparks mixed market sentiment
• Technicals show overbought RSI and bullish short-term momentum

Natera’s sharp intraday decline has drawn attention as the biotech sector grapples with regulatory and clinical uncertainty. The stock’s 7.8% drop, despite positive news from a key partnership with Exelixis, highlights investor skepticism. With a 52-week high of $256.36 and a dynamic PE of -95.29, the stock’s fundamentals clash with its technicals, which suggest a potential rebound. Traders are now parsing options data and sector trends to gauge the next move.

Collaboration Sparks Regulatory and Market Doubts
Natera’s selloff follows its collaboration with Exelixis on the STELLAR-316 trial for colorectal cancer, despite Exelixis’ own 6% rise on the same news. While the partnership positions Natera’s Signatera test as a potential MRD-guided treatment tool, investors are wary of regulatory hurdles and competition. The trial’s reliance on Natera’s commercial Signatera testing—already facing patent litigation with NeoGenomics—adds uncertainty. Additionally, the biotech sector’s broader volatility, driven by mixed earnings and FDA scrutiny, has amplified risk-off sentiment.

Biotech Sector Mixed as Natera Trails Peers
The biotech sector remains fragmented, with Amgen and Regeneron showing resilience while smaller players like Natera face headwinds. Natera’s 7.8% drop contrasts with the sector’s 17.2% annual gain, underscoring its vulnerability to regulatory and clinical risks. The recent $840M acquisition of Dark Blue Therapeutics by Amgen highlights M&A activity as a stabilizing force, whereas Natera’s reliance on partnerships and unproven MRD-guided therapies leaves it exposed to market skepticism.

Options and ETFs to Watch in a Volatile Biotech Climate
• MACD: 5.29 (above signal line 4.23), RSI: 79.31 (overbought), 200D MA: $174.99 (far below current price)
• Bollinger Bands: Upper $247.80, Middle $233.48, Lower $219.16 (price near lower band)
• Support/Resistance: 30D $235.42–$236.01, 200D $166.44–$168.88

Technical indicators suggest a short-term rebound is likely, with key support at $219.16 and resistance at $247.80. The RSI’s overbought level (79.31) hints at potential pullback, while the bullish MACD histogram (1.06) supports a near-term rally. For options, focus on high-leverage contracts with moderate delta and liquidity:

• NTRA20260116C240 (Call, $240 strike, 1/16/2026):
- IV: 39.65% (moderate)
- Leverage: 57.49% (high)
- Delta: 0.404 (moderate sensitivity)
- Theta: -0.736 (rapid time decay)
- Gamma: 0.026 (strong price sensitivity)
- Turnover: 260,976 (high liquidity)
- Payoff (5% downside): $15.30 (max(0, 222.87 - 240) = 0)
- Why: High leverage and liquidity make this ideal for a short-term rebound trade.

• NTRA20260116C250 (Call, $250 strike, 1/16/2026):
- IV: 47.76% (high)
- Leverage: 102.48% (very high)
- Delta: 0.231 (low sensitivity)
- Theta: -0.540 (moderate decay)
- Gamma: 0.017 (moderate sensitivity)
- Turnover: 51,338 (solid liquidity)
- Payoff (5% downside): $0 (max(0, 222.87 - 250) = 0)
- Why: High leverage suits aggressive bulls expecting a sharp rebound above $250.

Hook: If $247.80 breaks, NTRA20260116C240 offers upside potential; bulls may chase NTRA20260116C250 into a bounce above $250.

Backtest Natera Stock Performance
The backtest of NTRA's performance after an intraday plunge of -8% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 54.81%, the 10-Day win rate is 57.53%, and the 30-Day win rate is 62.97%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 12.05%, which occurred on day 59, suggesting that NTRA has the potential for recovery and even exceed pre-plunge levels.

Act Now: Natera at Pivotal Crossroads
Natera’s 7.8% drop has created a critical juncture for investors. While technicals suggest a rebound is imminent, the stock’s reliance on regulatory approvals and clinical trial outcomes introduces risk. The STELLAR-316 trial’s success could validate Signatera’s MRD-guided approach, but near-term volatility is likely. Watch for a break above $247.80 or a breakdown below $219.16 to confirm direction. Meanwhile, the sector leader Illumina (ILMN) is down 2.61%, signaling broader biotech caution. Aggressive traders may consider the NTRA20260116C240 call for a short-term rebound play.