Regencell Bioscience Plummets 7.7% Amid Biotech Sector Turmoil: What's Fueling the Selloff?

Summary
• Regencell Bioscience (RGC) plunges 7.74% intraday to $12.75, its lowest since the July 31 stock split
• Sector leader Amgen (AMGN) declines 1.43%, signaling broader biotech sector weakness
• Short interest in RGC surges 0.44% monthly, with 11.89% of float sold short

Regencell Bioscience’s sharp intraday decline has captured market attention as the stock trades near its 52-week low of $0.09. Amid a broader biotech sector selloff led by Amgen’s 1.43% drop, RGC’s volatility reflects a perfect storm of post-split adjustment, bearish sentiment, and technical breakdowns. With the stock trading between $12.41 and $13.82, the move underscores fragile investor confidence in speculative biotech plays.

Post-Split Volatility and Short Interest Surge Drive Sharp Decline
Regencell’s 38-for-1 stock split in June 2025 initially fueled a 11,000% surge in H1 2025, but the euphoria has since evaporated. The recent 19.8% drop in July 2025, coupled with a 0.44% monthly increase in short interest, signals a shift in sentiment. While the company’s news sentiment score of 1.87 (above the biotech sector average) attracted some buyers, the 11.89% short float and 1.7 days-to-cover ratio indicate a bearish overhang. The absence of dividend growth or institutional ownership further exacerbates vulnerability to short-term selling pressure.

Biotech Sector Under Pressure as AMGN Drags Down Momentum
The broader biotech sector faces headwinds as Amgen’s 1.43% decline reflects investor caution. Recent sector news highlights Sanofi’s underwhelming eczema trial and AC Immune’s 30% workforce cut, amplifying risk-off sentiment. While RGC’s drop is amplified by its own structural weaknesses (e.g., 691 P/B ratio, no dividend), the sector-wide selloff underscores macroeconomic concerns. However, RGC’s volatility is more pronounced due to its speculative profile and high short interest.

Options Playbook: Leveraging Volatility in a Bearish Biotech Climate
• MACD: -7.56 (bearish divergence), Signal Line: -11.10, Histogram: 3.54 (positive but weak)
• RSI: 52.06 (neutral), Bollinger Bands: $11.77 (lower band) vs. $12.75 (current price)
• 200D MA: $83.91 (far above current price), 30D MA: $13.53 (resistance near $13.50)

RGC’s technicals suggest a potential bounce from oversold territory but remain bearish in the near term. The 52W range of $0.09–$83.60 highlights extreme volatility, while the 1.27% turnover rate indicates limited liquidity. For options, focus on near-term puts with high leverage and implied volatility:

• RGC20250919P12.5 (Put, $12.5 strike, 9/19 expiry):
- IV: 158.04% (extreme volatility)
- Leverage: 8.61% (high)
- Delta: -0.40 (moderate sensitivity)
- Gamma: 0.091 (responsive to price swings)
- Turnover: $3,260 (liquid)
- Price Change Ratio: +49% (bullish put)
- Payoff at 5% Downside: $0.25 (max(0, 12.5 - 12.11))
- Why: High IV and leverage make this ideal for a short-term bearish bet, with gamma ensuring responsiveness to further declines.

• RGC20251219P12.5 (Put, $12.5 strike, 12/19 expiry):
- IV: 173.51% (even higher volatility)
- Leverage: 2.98% (moderate)
- Delta: -0.30 (lower sensitivity)
- Gamma: 0.029 (less responsive)
- Turnover: $0 (illiquid)
- Price Change Ratio: 0% (neutral)
- Payoff at 5% Downside: $0.25 (max(0, 12.5 - 12.11))
- Why: While IV is extreme, low liquidity and delta make this a speculative play for long-term bearish scenarios.

Action Insight: Aggressive bears should prioritize RGC20250919P12.5 for a 9/19 expiry play, while monitoring the 200D MA ($83.91) as a long-term floor. A break below $12.41 (intraday low) could trigger a cascade of short-covering.

Backtest Regencell Bioscience Stock Performance

Act Now: Position for Biotech's Next Move as RGC Tests Key Levels
Regencell Bioscience’s 7.7% drop reflects a confluence of post-split exhaustion, bearish sentiment, and sector-wide weakness. While technicals hint at a potential bounce from the Bollinger lower band ($11.77), the 11.89% short float and 1.7 days-to-cover ratio suggest further downside risk. Investors should watch the 30D MA ($13.50) as a near-term resistance and the 200D MA ($83.91) as a long-term floor. With sector leader Amgen down 1.43%, the broader biotech environment remains fragile. Immediate action: Consider the RGC20250919P12.5 put for a high-leverage, short-term bearish play if the stock breaks below $12.41.