Why is the Avita Medical share price tracking 20% higher today?

medical asx share price represented by doctor giving thumbs upmedical asx share price represented by doctor giving thumbs up

The AVITA Medical Inc (ASX: AVH) share price has shot well into the green in lunchtime trade on Wednesday.

At the time of writing, the company’s shares are 19.88% higher at $2.05 apiece on no news.

In broader market moves, the S&P/ASX 200 Health Care Index (ASX: XHJ) is 0.35% lower so far today.

Let’s check what may be going on.

What’s up with the Avita Medical share price?

It’s been a quiet few months from the regenerative medicine company, although not so much on the charts.

Avita shares have eroded more than 40% this year to date, after gliding from a high of $5.61 on 2 September 2021.

They found a bottom almost a year later at $1.32 on 17 June.

However, the healthcare share has caught a bid since then and now trades more than 42% higher on the month, and up 27% in the past five days of trade.

While there’s been no news from Avita’s end, two things stand out. First, the company is set to report earnings next week on 11 August.

Second is that healthcare shares have been strengthening ever since we rolled into the new financial year.

As seen on the chart below, both the healthcare benchmark index and the Avita share price bounced from lows in late June and have curled up since.

TradingView Chart

In the absence of any company-specific updates, it stands to reason the share might be attracting buyers on the back of this sector strength.

With Avita due to post earnings next week, investors may also be expecting a strong report from the company.

Either way, it looks a little early to tell if the Avita share price has completely turned the corner. In the last 12 months, it is down 61% and has some catching up to do.

The post Why is the Avita Medical share price tracking 20% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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