Chart Of The Day: Moderna Shares Receive A Painful Jab From The U.S. CDC

Chart Of The Day: Moderna Shares Receive A Painful Jab From The U.S. CDC

Shares of Moderna (NASDAQ:) stalled last week as markets awaited information from a US Centers for Disease Control (CDC) panel on COVID vaccine recommendations. On Monday, the CDC panel’s initial guidance was : they unanimously recommended the Pfizer (NYSE:) BioNTech (NASDAQ:) shot for everyone age 16 and older.

It wasn’t exactly good news for Moderna. On Tuesday the stock had already lost 2.7% in the premarket, after Japan pulled 1 million more of the biotech’s vaccines from distribution, adding to the 1.63 million doses already pulled last week after two deaths occurred, due to contamination.

There was better news for the drugmaker yesterday: a study involving Belgian health care workers, published in the Journal of the American Medical Association on Monday, found that Moderna produces double the antibodies of the Pfizer vaccine, which could create more demand for the MRNA inoculation going forward.

Still, the current supply and demand dynamics for the stock aren’t stellar.

MRNA Daily

Moderna completed a rising flag, after the price crossed below its recent uptrend line, potentially bearish after the 29% plunge in the first half of August.

The price attempted to rise over the last few of sessions, but produced long upper shadows, demonstrating the bulls backtracking as bears push the price lower.

The MACD’s short MA crossed below the long MA, producing a sell signal as the price fell below its uptrend line. The RSI topped out, demonstrating weakening momentum.

Trading Strategies

Conservative traders should wait for the price to retest the flag’s low, supported by a hammer, then to return toward the pattern and find selling pressure, before risking a short.

Moderate traders would also hold off till the price falls, then rises for a better entry, if not for confirmation.

Aggressive traders could immediately sell, provided they accept the added risk of moving before the rest of the market.

Trade Sample

  • Entry: $377
  • Stop-Loss: $402
  • Risk: $25
  • Target: $302
  • Reward: $75
  • Risk:Reward Ratio: 1:3

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