Zinger Key Points
- Moderna negated its downtrend with a higher high but has yet to confirm an uptrend with a higher low.
- Eventually Moderna will consolidate the big move higher, possibly by printing an inside bar pattern.
Moderna, Inc MRNA gapped up 13% to start the trading day on Tuesday and was skyrocketing an additional 12% intraday after announcing that its Merck & Co, Inc MRK partnered cancer vaccine met the primary efficacy endpoint.
The results showed that mRNA cancer vaccine + Keytruda demonstrated a statistically significant and clinically meaningful improvement in recurrence-free survival (RFS) versus Keytruda alone for the adjuvant treatment of stage III/IV melanoma following complete resection.
The news allowed Moderna to climb significantly higher, in contrast to the S&P 500, which initially surged about 2% after CPI data was released but fell intraday to trade mostly flat.
The Labor Department reported headline CPI rose 7.1% year-over-year in November, down from 7.7% in October and below the 7.3% average economist estimate. Although the news was met positively at first, traders and investors may be waiting to see if the Federal Reserve believes inflation has slowed enough to start relaxing its policy.
Although Moderna is strong compared to the market, the stock will eventually need to enter a consolidation phase after making such a steep move higher. That could come later this week in the form of a series of inside bars, or lower prices to confirm a new downtrend.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The Moderna Chart: Moderna negated its current downtrend on Tuesday by printing a higher high above Friday’s lower high of $185.41. For a new uptrend to confirm, Moderna will need to trade lower to print a higher low above $162.78.
The move higher caused Moderna’s relative strength index (RSI) to increase to about 67%. When a stock’s RSI nears or reaches the 70% level, it becomes overbought, which can be a sell signal for technical traders.
If Moderna closes the trading day near its high-of-day price, the stock will print a bullish kicker candlestick, which could indicate higher prices will come again on Wednesday. If that happens, Moderna’s RSI will become overextended.
If Moderna closes the session with a significant upper wick, it could indicate lower prices or sideways trading in an inside bar pattern are on the horizon. If Moderna prints an inside bar over the next day or two, the pattern will lean bullish for future continuation to the upside.
Modern has resistance above at $221.50 and $245.70 and support below at $197.72 and $179.54.
Read Next: FDA Authorizes Pfizer/BioNTech And Moderna's Bivalent COVID Shots For 6 Months Old
Photo: Courtesy of Shutterstock.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
