This Biotech Stock Is Up 500% Wednesday. Here's How I'm Trading It.

Small-cap strength continues on Wednesday with the Russell 2000 IWM rising 0.9% while the Nasdaq 100 QQQ is down 0.1% and the Magnificent Seven trading flat.

There is a long list of smaller stocks moving up 10% or more, but some of the hot meme plays are reversing hard. Kohl's KSS, Wendy's WEN, and Krispy Kreme DNUT are well off their early highs. It is likely that there are aggressive traders shorting these unjustified moves.

While there is renewed activity in meme plays, it is not at all close to what we saw back when names such as GameStop GME and AMC Entertainment AMC blasted off back in 2021. While traders are having some fun with the current meme names, this is not the same sort of frenzy we have seen in prior cycles.

Overall market breadth is running two to one positive, but the Magnificent Seven MAGS is preventing upside in the senior indexes. Small-caps are currently the leaders.

One name I'm trading Wednesday is ABIVAX Societe Anonyme (ABVX). The company posted very strong results for its daily pill for the treatment of ulcerative colitis. This is a very big market and the results were quite good. As a consequence, the stock is up over 5x on the news.

Many traders would shy away from a stock that moves from $10 to $65 overnight, but a stock that moves this much tends to stay very volatile. There will be some big swings that offer a good opportunity for traders who want to watch the intraday action closely.

Also, it is very likely that the company will announce a secondary offering at any time to finance the commercialization of their drug. This is well-anticipated and is priced in to some extent but if that news is announced I expect another trading opportunity to arise.

So far, I see price targets of $70, $71, $95, $101, $101 from analysts and those targets will likely be increased once the company shows the ability to commercialize the product.

This sort of trading isn't for everyone, but if you are willing to track the price action closely during the day, there is very likely to be notable intraday swings.

From a more conservative standpoint, I'm looking closely at adding to Uber UBER, which will report earnings on August 6. The company has had a number of target increases recently, with Morgan Stanley MS setting one of $115, up from $95. A recent joint venture with Lucid Group LCID bodes well for its next-generation robotaxi program. The stock has support at its 50-day simple moving average around $90.

I continue to look for ways to put more cash to work, but we will need some sort of shakeup to produce better charts.

At the time of publication, Rev Shark was long ABVX, UBER.