Musk Looks to Partner with this Medical Device Company to Manufacture Ventilators for COVID-19 Patients
COVID-19 patients exhibiting acute symptoms typically require ventilators to push air into their lungs. Many patients that are currently suffering and who have recovered have discussed the need for the machines to turned to its highest setting. While there are certainly potential for treatments to help lessen the symptoms, it’s still likely not enough as the shortage of ventilators grow.
The push to increase production of ventilator equipment apparently has been expanding and has now attracted some interest on the part of Elon Musk. In a tweet on March 21, 2020, he said, “Just had a long engineering discussion with Medtronic about state-of-the-art ventilators. Very impressive team!” His conversation was with medical device manufacturer Medtronic Plc (MDT). On Wednesday, MDT had an announcement of its own as the company committed $10M in contributions to COVID-19 relief efforts.
While the announcement itself wasn’t likely a catalyst, the stock broke out today on volume that was around 60% greater than its 20-day average volume. Despite the fade that most stocks experienced going into the close, MDT was able to hang on to an 8.05% advance and a close above a recent area of resistance near $82. It’s had a number of higher volume up days since March 12, but hasn’t been able to sustain any movement until the past couple days.
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The near-term projection for MDT is $103, which is the 61.8% retracement level of the downtrend from early February.
Option traders could consider a 17 APR 20 87/89 long call vertical for around $1. The max gain of $100 per contract, or 100% ROR, would be achieved if the stock closes above $89 at expiration. Consider closing early if it can be sold for $1.60 or more.