Here's What To Watch On Novavax Stock As Latest COVID-19 Vaccine Gains Approval

Novavax, Inc NVAX gapped up 10% to start the trading day on Wednesday, but at press time, the stock had given back almost all of its gains to trade mostly flat.

The pharmaceutical company’s NVX-CoV2373 COVID-19 vaccine was recommended for Emergency Use Authorization for individuals 18 years of age and older by a committee of independent U.S. Food and Drug Administration vaccine advisors. The vaccine will be the fourth available COVID-19 vaccine available in the U.S.

The news didn’t impress Bank of America analyst Alec Stranahan, who maintained an Underperform rating on the stock with a $35 price target. Stranahan doesn’t believe the demand for vaccines outweighs the current supply.

The brief rally in Novavax appeared likely from a technical perspective, regardless of the news, because the stock has been trading in a downtrend and was due to print a lower high. Although the trend suggests more downside, there are bullish signs on Novavax’s chart traders can watch for.

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The Novavax Chart: Novavax’s downtrend began on May 19 and the stock’s most recent lower high was printed on June 1 at $57.49 and the most recent lower low was formed at the $41.10 mark on Monday. Wednesday’s high-of-day may mark the next lower high within the downtrend, although more candles will need to print for verification.

• Bullish traders will be watching for the double bottom pattern to hold and, perhaps, become recognized, especially if Novavax trades lower to form a triple bottom pattern. The double bottom pattern was printed at the $41.33 on May 12 and Monday and if Novavax can reverse to the upside again at that level it could provide a solid entry point.
• Bullish traders can also take note of the bullish divergence that is occurring on Novavax’s chart. Novavax has been trading within the $40 to $63 range since April 7, but the stock’s relative strength index has been making a series of higher lows, which indicates Novavax is gaining momentum.
• Bearish traders want to see Novavax continue to reject the eight-day and 21-day exponential moving averages (EMAs), which could continue to guide the stock lower.
• Novavax has resistance above the EMAs at $54.50 and $76.59 and support below at $40.98 and $26.10.

See Also: How to Read Candlestick Charts for Beginners