Moderna stock is sharply off its highs, but the charts are showing constructive action and investors wonder whether the stock has bottomed.
Moderna (MRNA) – Get Moderna Inc. Report shares have been bold in the headlines the past few days.
On Wednesday the drugmaker’s shares erupted 17% at one point, then closed 8.3% higher. The rally came on news that Moderna and Merck (MRK) – Get Merck & Company Inc. Report would work together to develop and market an mRNA structured cancer vaccine.
It also reflected news that Moderna and Pfizer (PFE) – Get Pfizer Inc. Report received Food and Drug Administration approval for booster shots in children as young as 5.
MRNA shares are down about 2% at last check, but the fall in the overall market — which can be attributed to the hotter-than-expected inflation report — is likely having an outsized effect.
Moderna and the S&P 500 are trying to rally off the morning lows, but investors’ bigger question for Moderna is more straightforward: Has the stock bottomed?
Trading Moderna Stock
Daily chart of Moderna stock.
Chart courtesy of TrendSpider.com
As we look at yesterday’s price action, Moderna stock suffered a clean rejection from the 50-day moving average.
Largely, though, this stock has been range-bound, trading mostly between $180 on the upside and $115 to $120 on the downside.
Amid the latest pullback, Moderna stock may have given bulls a double-bottom to work with, as support came into play in a key zone. Not only was the $115 level the low from June, but it’s also where the newly established 200-week moving average came into play.
The rally out of this zone was impressive, even if it did fail at the 50-day.
From here, Moderna stock would have done well to fill Wednesday’s gap down at $124.78. But for now, it’s holding the 10-day and 21-day moving averages. That’s constructive.
Aggressive bulls — and I do mean aggressive, given the current climate — can justify a long trade position in Moderna, so long as the stock remains above the 10-day and 21-day.
If it breaks these measures, then those bulls will have to count on the gap-fill to buoy the stock price, and I just don’t think that’s reliable enough. Instead, it likely opens the door back down to the $115 to $120 area.
On the upside, let’s see if Moderna stock can give bulls another rally back up toward $140 and the 50-day moving average. To get there, it will likely need some cooperation from the broader market, but if we see this area, then it’s likely a spot to book some profits.
