Why did Race Oncology (ASX:RAC) shares bounce 14% higher on Wednesday?


Shares in Race Oncology Ltd (ASX: RAC) soaring today to finish trading 14% higher in the green.

The Race Oncology share price flamed higher despite no market-sensitive information from the company’s camp, nor was there any major upsets in the wider sector.

Zooming out, we see that Race Oncology is down over 32% for the year, and 11% in the last month alone, which could be important information.

It’s not abundantly clear what’s sent Race’s share price further north today.

The S&P/ASX 200 Health Care index (XHJ) was also firmly in the green today, finishing up 0.29% at 38,796 points.

Trading volume of Race Oncology shares was also substantially higher than normal, above the 4-week average at 890,904 shares.

Looking a bit deeper at the order book and market depth monitor provided by Bloomberg Intelligence, it’s also clear that brokers filled more buy orders than sell orders today as well, when measured by volume.

In fact, at one point 74% of the order volume has stemmed from those asking to buy and another 22% from those offloading Race Oncology shares.

The first of these large orders was filled at around 11:58 am, just when shares really took off, as seen on the chart below which tracks Race’s performance on Wednesday.

There’s been a tug-of-war between buyers and sellers over the past two hours of trade but nonetheless, considering the laws of supply and demand, when there are more buyers than sellers – this tends to bid the price up in markets.

It remains to be seen exactly what’s got market pundits piling in today to secure a spot in the front row of Race’s growth story.

But with smaller ASX shares by market capitalisation, even modestly sized order volumes can cause large fluctuations in the share price.

Not to mention during market volatility, that’s when speculators and large trading firms tend to be most active, to capture price movements in each direction.

Race Oncology share price snapshot

In the past 12 months, the Race Oncology share price has lost 32% after collapsing from a high of $3.71 last year. This year to date, things aren’t any better and shares have tanked 27%.

At the current share price, Race Oncology has a market capitalisation of $419.5 million.

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