Chart Wars: Will Pfizer Soar Higher Than Moderna As Omicron Variant Takes Hold?

Moderna, Inc MRNA and Pfizer PFE have both formed weekly chart patterns that could provide clues to their future direction for the long-minded trader and investor.

Pfizer has formed a bull flag pattern while Moderna may be reversing course into an uptrend. Both stocks have soared since COVID-19 spread across the world with Pfizer and Moderna trading up 91.62% and a whopping 1,020%, respectively, since April 1, 2020.

Both stocks look to be headed higher still but it should be noted that events affecting the direction of the general markets, positive or negative reactions to earnings prints and news headlines about a stock can quickly invalidate patterns.

As the saying goes, "the trend is your friend until it isn't" and any trader in a position should have a clear stop set in place and manage their risk versus reward.

The two pharmaceutical stocks became household names during the onslaught of the pandemic because each company produced an effective COVID-19 vaccine. With the emergence of the new omicron variant, Pfizer and Moderna’s vaccines have come under scrutiny as to whether or not they offer enough protection against hospitalization with many health professionals agreeing a third booster shot of the vaccines will now be required.

Pfizer may be ahead of Moderna in the race to produce omicron targeted therapies because on Tuesday, Pfizer released data to federal regulators showing its COVID-19 oral antiviral pill is 89% effective in reducing the need for hospitalization in high-risk adults, including those infected with the new variant. Moderna, on the other hand, has plans to produce an omicron-targeted vaccine but on Nov. 30 said it could be months before it is able to produce at scale.

See Also: UK Reports First Omicron Death, PM Johnson Encourages Boosters

The Pfizer Chart: On Monday, Pfizer broke up into blue skies from a weekly bull flag pattern, with the pole created between the weeks of Oct. 18 and Nov. 29 and the flag formed between Nov. 29 and Dec. 10.

• The measured move of the break out from the pattern, which is calculated by measuring the length of the pole and adding the number to the lowest price within the flag, is about 35%. This indicates Pfizer could trade up toward the $68 level in the future, although it could be quite some time before that happens.
• The eight-day exponential moving average (EMA) on the weekly chart has been guiding the stock higher since Nov. 1 and is likely to act as support.
• Pfizer will eventually need to retrace and print a higher low on the daily chart because its relative strength index has become extended above the 70% on major timeframes.
• The stock has no resistance above in the form of price history and has support below at $55.70 and $51.86.

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The Moderna Chart: Moderna reached an all-time high of $497.49 on Aug. 10 and then reversed course into a long-term downtrend on the weekly chart to reach a low of $210.96 the week of Nov. 1.

• The week of Nov. 29, Modern printed a higher high above the Oct. 25 high of $356.77, which indicated the stock may reverse course again into an uptrend. On Dec. 10, Moderna may have printed the higher low but will need to print another higher high for confirmation the trend is changing.
• Bullish traders who are not already in a position may feel more confident going forward if Moderna is able to recapture the eight-day EMA on the weekly chart as support.
• Moderna has resistance above at $288.88 and $307.33 and support below at $263.07 and $245.70.