Trump’s Inauguration Sparks Uncertainty for Vaccine Stocks
As the Trump administration prepares to take office, investors are bracing for significant policy changes that could impact various industries. One sector that’s already feeling the heat is vaccine stocks, particularly Pfizer Inc (NYSE:PFE), following the appointment of Robert F. Kennedy Jr. to lead the Department of Health and Human Services.
A History of January Blues
Pfizer’s stock has a troubling trend of underperforming in January, with an average loss of 4.6% over the past decade, according to data from Schaeffer’s Senior Quantitative Analyst Rocky White. In fact, the stock has finished the month in the red eight out of the last 10 years, with the last positive January performance dating back to 2018. If this trend continues, Pfizer’s current price of $26.39 could plummet to around $25.
Current Market Performance
Despite a slight pullback today, Pfizer’s stock remains well above its November 15 low of $24.48, its lowest mark since January 2013. Although the stock is down 8.2% this year, it’s poised for a small December gain, which could break its four-month losing streak.
Options Traders May Need to Reassess
If Pfizer’s historical January trend plays out again, options traders may need to adjust their optimistic outlook. The stock’s Schaeffer’s put/call open interest ratio (SOIR) of 0.55, which sits in the 1st percentile of annual readings, indicates a strong bias towards calls among short-term premium players. However, the Schaeffer’s Volatility Index (SVI) of 20%, which ranks in the 11th percentile of the last 12 months, suggests that options may be an attractive route for investors.
A Prime Selling Opportunity?
Pfizer’s Schaeffer’s Volatility Scorecard (SVS) of 30 out of 100 makes it a prime selling candidate for short-term bulls. With uncertainty surrounding vaccine stocks, investors may want to exercise caution and reassess their positions in Pfizer.
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