The bad news is that Biogen Inc (NASDAQ:BIIB) stock is down 32% since the end of January. The good news is that the shares are poised to bounce back from this selloff. What’s more, you can profit handsomely from the rebound.

After falling throughout February, BIIB stock’s decline came to a halt in the $275-$280 region. Since about the end of February, Biogen stock entered a period of consolidation in the area. The shares appeared to be gathering steam for a return to higher climbs, and even broke out above their 10-day and 20-day moving averages on Friday.

Click to Enlarge Monday’s broad-market malaise sent BIIB stock sharply lower, however, as risk aversion once again smacked the stock. However, Biogen stock has now formed a double bottom technical formation near $275. Given the stock’s prior breakout momentum, a rebound from currently levels appears inevitable.

On the sentiment front, Biogen’s February decline has had little impact on longer-term expectations. Currently, data from Thomson/First Call reveals that 21 of the 32 analysts following BIIB stock rate it a “buy” or better, with no “sell” ratings to be had.  Furthermore, the 12-month consensus price target of $378.90 leaves plenty of room to run higher before valuation concerns kick in.

Options traders, meanwhile, are growing more bullish on BIIB’s prospects. Currently, the April put/call open interest ratio rests at 0.67, with calls nearly doubling puts among front-month options. This ratio has also trended higher amid Biogen stock’s consolidation period. In short, even BIIB stock options traders are looking for a rebound from the stock’s heavy February selloff.

Finally, April option implieds are pricing in a potential 6% move through April expiration.  This places the upper bound just shy of $295 and the lower bound at about $262.

2 Trades for BIIB Stock

Call Spread: With the path of least resistance lying to the upside and BIIB stock already looking to break out ahead of Monday’s selling, a bullish call spread has plenty of potential. Traders looking to bet bullish might consider an April $285/$290 bull call spread.

At last check, this trade was offered at $1.60, or $160 per pair of contracts. Breakeven lies at $286.60, while a maximum profit of $3.40, or $340 per pair of contracts — a potential return of 112% — is possible if BIIB stock closes at or above $290 when April options expire.

Put Sell: Alternately, if you’re not sold on a BIIB rally, an April $255 put sell might be a way to capitalize on technical support. At last check, this put was bid at $1.44, or $144 per contract.

The upside to this put sell strategy is that you keep the premium as long as BIIB stock closes above $255 when April options expire next month. The downside is that should BIIB trade below $255 ahead of expiration, you could be assigned 100 shares for each sold put at a cost of $255 per share.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.