PreMarket Prep Stock Of The Day: Moderna

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

Over the past few months, biotech and pharmaceutical companies have been making big moves upon the announcement of any COVID-19 vaccine news. Today's example is the price action in Moderna MRNA.

One Of The Big Winners: There have been winners and losers in the race for a COVID-19 vaccine and or treatments. While Gilead Sciences GILD was one of the early winners, all of the unexpected rallies in the issue have been sold hard. All the attempts to clear $80 were snuffed out and it's back under $70.

Meanwhile, Moderna has rallied from its yearly low in January ($17.68) to an all-time high on July 17 at $95.21. The ride has been bumpy at times, especially when it swooned from its May 18 high ($87) only to trade to $46.13 six days later. From there it doubled in a month when it topped out at $95.21.

Another Wicked Retreat, Rally And More Red: Similar to its earlier collapse, the issue shed nearly $30 in five days, falling from $95.21 to $66.54 on July 23, but rebounded to end the session at $73.21. Two days later, a rally to $83.85 again was greeted with sellers, which brought the issue back down to its recent low. It bottomed on Monday at $67 and rebounded to end Tuesday's session at $68.97.

Sellers After-Hours At The $78 Area: After the close on Tuesday, the company announced it granted an option to the U.S. government to buy up to an added 400 million doses of its coronavirus vaccine candidate.

As usual, the issue spiked to $78.35 from its closing price of $68.97 and ended the after-hours session at $76.75.

Call Off The Price Action During The Show: When the issue was being discussed on the show, it was trading at $75 area. Show producer Spencer Israel read and acknowledged the good news, but was skeptical as the company was getting sales “for a drug it has not produced yet.”

The author of this article was cautious as to whether or not if the rally would hold. The reason being the recent price action in Novavax NVAX after its last positive announcement; It peaked on Aug. 5 at $189.80 and swooned to $112.51 on Tuesday.

Price Action Off The Open: After a higher open, Moderna moved another 8 cents to $75.75 and sharply reversed course. At one point, it went red for the day when it reached $68.30 and is attempting to reenter the $70 handle as of 11:45 a.m. EST.