Novavax Looks Like It's Bouncing Off Support In A Pattern

Novavax, Inc. NVAX shares are trading lower Friday as most COVID-19-related biopharma stocks dropped.

The weakness was partly due to the broader market sell-off, triggered by higher bond yields and expectations of removal of monetary policy accommodation.

Novavax was down 16.94% at $172.02 at last check Friday afternoon.

Novavax Daily Chart Analysis

• Shares look to be nearing support in what technical traders call a pennant pattern.
• The stock has been condensed between narrowing highs and lows and could be nearing the end of a pennant pattern in the coming weeks. The price may need to be condensed between the highs and lows for a time before the stock is ready to break out.
• The stock is trading below both the 50-day moving average (green) and the 200-day moving average (blue), indicating sentiment in the stock looks to be turning bearish.
• Each of these moving averages may hold as a possible area of resistance in the future.
• The Relative Strength Index (RSI) has been pushing lower and now sits at the 32 level. This borders the oversold area and shows that there has been much more selling pressure in the stock than buying pressure.

See Also: Why Moderna, Novavax And Other COVID-19 Vaccine Stocks Are Plummeting

What’s Next For Novavax?

Bullish traders are looking to see the stock bounce off pattern support and continue to trade within the pennant pattern for a time, before breaking above pattern resistance and seeing a strong bullish move.

Bears are looking to see the stock continue to fall lower and break below the pattern support. If the stock could break below this level, it may show that the stock is ready to see a further bearish push. Pattern support may then turn into an area of resistance for the stock.

Photo: Novavax