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Buying or Shorting Moderna? Technical support & resistance

September 13, 2021 18:47
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This post will talk about the latest important news connected with Moderna and where the price of this stock could move in the upcoming period. Moderna is an American biotechnology company that focuses on drug discovery, drug development, and vaccine technologies based exclusively on messenger RNA (mRNA). Moderna shares remain in the investors' focus since the company has announced in March 2020 that it could have a COVID-19 vaccine ready in a few months. Since then, the stock price has exploded and advanced from $30 above $490, while the current share price stands around $416. Looking to trade Moderna as CFD? Try with Capital today!

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Moderna reported better than expected second fiscal quarter results on August 05, 2021; total revenue has increased by 6392.5% Y/Y to $4.35 billion, while the GAAP EPS was $6.46  (beats by $0.87). Total revenue has increased above expectations (+120 million), and it is important to mention that product sales for the six months ended June 30, 2021, from sales of 302 million doses of the company's COVID-19 vaccine was $5.9 billion. Moderna reported that its COVID-19 vaccine is 93% effective six months after the second dose, and according to the latest news, the company has completed the submission to the FDA seeking a review of its booster COVID-19 shot.

We are pleased to announce that we completed our submission to the @US_FDA, which we began on Wednesday, for the evaluation of a booster dose of the Moderna COVID-19 vaccine,” Moderna (MRNA) wrote in a tweet.

Another positive information is that Moderna announced that it expects dose capacity for its COVID-19 vaccine in the 2021 fiscal year to be between 800 million and 1 billion doses. Last month, the board of directors approved a share repurchase program of up to $1 billion over a two-year period to return excess capital to shareholders.

The company's fundamentals continue to improve, but with a 160 billion USD market capitalization, this company/stock is still too expensive, in my opinion. Moderna will undoubtedly profit from its COVID-19 vaccines, but the current share price does not represent a good value for long-term investors. The company is highly dependent on delivering its COVID-19 vaccine, and if Moderna generates COVID-19 revenue less than previously estimated, the stock price will be at much lower levels. Where do you think Moderna is heading? Try a demo account with AvaTrade today!

Technical analysis
Moderna's shares are trading down more than 15% from their recent highs registered in August 2021, and the risk of another decline is not over yet. We can expect that the price could test the current support level at $400 again, and one of the easiest ways to buy or short Moderna shares is through a margin trading platform. It's not a good idea to hold a short position for long periods or to leave an open position with no stop-loss order.

moderna website

I marked current support and resistance levels on the chart above to help traders understand where the price could move. The more often price tests a level of resistance or support without breaking it, the stronger the resistance or support area is. Moderna has been a great performer during the first eight months of the 2021 year, and if the price advances again above $450, the next resistance could be located around $500. The current support level is $400, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $380. If the price drops below $350, which represents very strong support, the next target could be located around $300 or even below.

Conclusion
Moderna shares remain in the investors' focus since the company has announced in March 2020 that it could have a COVID-19 vaccine ready in a few months. Since then, the stock price has exploded and advanced from $30 above $490, while the current share price stands around $416. Moderna reported better than expected second fiscal quarter results last month, and it is important to say that the total revenue has increased by 6392.5% Y/Y to $4.35 billion. Moderna reported that its COVID-19 vaccine is 93% effective six months after the second dose and announced that it expects dose capacity for its COVID-19 vaccine in the 2021 fiscal year to be between 800 million and 1 billion doses. Moderna will undoubtedly profit from its COVID-19 vaccines; still with a 160 billion USD market capitalization, this company/stock is still too expensive, in my opinion. The current support level is $400, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $380. If the price drops below $350, which represents very strong support, the next target could be located around $300 or even below.

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