SPRY Surges 8.8% on Unprecedented Momentum: What's Fueling This Biotech Rally?

Summary
• ARS Pharmaceuticals (SPRY) surges 8.81% to $11.36, hitting an intraday high of $11.45
• Turnover spikes to 1.4M shares, outpacing 2.34% of float
• RSI hits 81.3, signaling overbought conditions with bullish momentum intact

ARS Pharmaceuticals has ignited a dramatic 8.81% rally in after-hours trading, propelling its stock to $11.36. The surge follows a volatile session marked by a $1.05 range between $10.40 and $11.45. With technical indicators flashing overbought conditions and options volatility spiking, the move raises urgent questions about catalysts and sustainability in this biotech play.

Options Volatility and Technical Breakouts Drive Sharp Rally
The explosive 8.81% move in SPRY is driven by a confluence of technical triggers and options market dynamics. A 0.25-point MACD crossover above the signal line ($0.049) has ignited short-term bullish momentum, while RSI at 81.3 suggests aggressive buying pressure. The stock has pierced above its 200-day MA ($12.81) and 100-day MA ($11.43), creating a rare technical alignment. Options data reveals heightened activity in January 2026 $12.5 calls (SPRY20260116C12.5) with 626 contracts traded, indicating institutional positioning for a continuation of the rally.

Pharma Sector Mixed as Johnson & Johnson Trails SPRY's Momentum
While SPRY's 8.81% surge outpaces the broader pharmaceutical sector, Johnson & Johnson (JNJ) remains the sector leader with a modest 1.34% intraday gain. The divergence highlights SPRY's speculative momentum versus JNJ's defensive positioning. SPRY's biotech peers like Day One Biopharma (DAWN +0.29%) and Kura Oncology (KURA -2.05%) show mixed performance, underscoring the stock's unique catalyst-driven move rather than sector-wide trends.

High-Volatility Options and ETF Positioning for Biotech Bulls
• 200-day MA: $12.81 (above) • RSI: 81.3 (overbought) • MACD: 0.2999 (bullish) • Bollinger Upper Band: $11.11 (below price) • Gamma: 0.1428 (high sensitivity) • Implied Volatility: 74.51% (elevated)

SPRY's technical profile suggests a continuation pattern with key support at $9.92 and resistance at $14.40. The 81.3 RSI reading indicates overbought conditions, but the 0.25 MACD histogram and 0.1428 gamma suggest strong near-term momentum. For leveraged exposure, consider the January 2026 $12.5 call (SPRY20260116C12.5) with 17.20% leverage and 0.394 delta. This contract offers 88.57% price change potential with 0.018264 theta decay and 0.1428 gamma sensitivity. A 5% upside to $11.93 would yield $0.43 payoff (max(0, 11.93-12.5)).

• SPRY20260116C12.5 (Call) • Strike: $12.5 • Expiry: 2026-01-16 • IV: 74.51% (high volatility) • Leverage: 17.20% (strong leverage) • Delta: 0.394 (moderate directional bias) • Theta: -0.018264 (moderate time decay) • Gamma: 0.1428 (high sensitivity) • Turnover: 36,922 (liquid)
• SPRY20260220C12.5 (Call) • Strike: $12.5 • Expiry: 2026-02-20 • IV: 93.27% (elevated volatility) • Leverage: 7.72% (moderate leverage) • Delta: 0.498 (balanced directional bias) • Theta: -0.015431 (moderate time decay) • Gamma: 0.0848 (moderate sensitivity) • Turnover: 4,848 (liquid)

The January $12.5 call stands out for its 17.20% leverage ratio and 0.1428 gamma, making it ideal for capitalizing on continued momentum. The February contract offers extended exposure with 93.27% IV but lower leverage. Aggressive bulls should consider SPRY20260116C12.5 into a break above $12.5, while hedgers may pair with the February put for downside protection.

Backtest ARS Pharmaceuticals Stock Performance
The performance of SPRY after a 9% intraday surge from 2022 to now has been modest, with a focus on potential regulatory approval and commercialization of Neffy. Here’s a detailed analysis:1. Merger and Shareholding: Silverback Therapeutics (SBTX) merged with ARS Pharmaceuticals in an all-stock transaction, resulting in SBTX shareholders owning approximately 37% of the combined entity, while ARS Pharmaceuticals’ shareholders held around 63%. The merged company, ARS Pharmaceuticals, operates under the ticker symbol SPRY on the Nasdaq Capital Market.2. Product Pipeline and Launch: The key focus for SPRY is the potential regulatory approval and commercialization of Neffy. This product is expected to launch in 2023, which could significantly impact the company's performance moving forward.3. Market Position and Outlook: The merger and the upcoming product launch suggest a positive outlook for SPRY. However, the performance will largely depend on the successful commercialization of Neffy and the company's ability to navigate regulatory hurdles.In conclusion, while a 9% intraday surge from 2022 to now might indicate a positive trend, the long-term performance of SPRY will likely be influenced by the successful execution of its product pipeline and market positioning. Investors should monitor the regulatory progress and product launch closely for a comprehensive understanding of SPRY's performance.

SPRY's 8.8% Rally: A High-Volatility Trade with Clear Entry Points
The 8.81% surge in SPRY reflects a technical breakout with strong options positioning, but sustainability depends on maintaining above $11.43 (100-day MA). Watch for a close above $12.5 to confirm the bullish case, while a retest of $9.92 support could trigger a reversal. With Johnson & Johnson (JNJ +1.34%) underperforming, SPRY's momentum suggests sector rotation into high-beta biotech plays. Aggressive traders should target the January $12.5 call (SPRY20260116C12.5) with a stop-loss below $10.40.