Enzo Biochem is definitely taking advantage of the pandemic. Sales for its testing equipment, etc soared in its second quarter to come in at almost $32 million. This was a huge gain over the same quarter of 12 month prior. The market consequently rewarded the stock once the numbers were released.
Being a low priced stock, Enzo at approximately $4 a share brings opportunity to the table. The reason being is that despite the strong rally today, shares are still trading at a lower valuation that the stock´s 5-year averages. Furthermore, being an optionable stock, implied volatility has spiked to approximately 240% in the back month. This means we have the possibility to reduce basis if that is indeed our favoured startegy.
If indeed, we have a breakaway gap here in play, price has no business dropping below the underside of the gap. The $3.60 level for example should not be breached if this is the start of a new bull run in this stock. Covered calls or naked puts look attractive in ENZ at present due to one´s ability to defend if needs be.