One of 2020s most exciting companies was Moderna (MRNA). Shares soared from $20 to as high as $170. Fast-forward to 2021, and MRNA is up nearly 200% YTD, and trades well north of $300 per share.
Moderna was recently added to the S&P 500. Some analysts have gone so far to call it the “Tesla of biotechs.”
We all know how pivotal its role was during the COVID-19 pandemic. And how it’s seen its stock price have a recent surge—as ongoing fear of the Delta variant impacts the economy and stocks.
If you’re not involved, have you missed the move for good?
Or Is there more upside in the stock?
Here’s my technical breakdown of the chart, and what the price action is telling us.
Has it Gone Too Far?
When you see a stock up over 200% YTD and nearly 60% in the past 5 weeks alone a question that intuitively comes to mind is – has it gone too far up?
It’s a fair thing to wonder, but, if the market has taught us anything over the past year, it is that nothing is ever up too much!
However creeped out you might be to look for long trades at these levels, right now MRNA has all the characteristics of an accelerating momentum name. Let’s have a look:
- Just a few weeks ago it had a clean break higher out of an 8-months long triangle
- It’s held above cleanly since and gradually continued the up move
- The volume is only starting to really pick up, right as the stock is advancing sharply higher – a sign of strengthening momentum, not weakening
- Just today MRNA has defended an attempted high-volume selloff from a day earlier and crawled back above $300
Look, I’m not convincing you to buy, but from a purely technical standpoint – there aren’t many reasons to be bearish just yet.
I might be looking at intraday scalps higher, should the $300 level firm up over the next few sessions.
But don’t run for the shares just yet, let’s first have a closer look at the price action of the past few days:
As you can see, the $320 level is clearly another area of interest for the stock – it’s served as both support and resistance on a number of occasions.
I’ll be monitoring it closely and for my long thesis, I want to see no troubles there.
If MRNA can’t hold above $320 and starts heading back towards $300 and lower, I’ll definitely consider bearish entries for at least pullback to $250s – the spot where the acceleration higher began.
Options Action Today
MRNA saw more than 170K calls today…that’s a significant number compared to its 40K daily call contract average.
We saw over 20K calls trade of this week’s $320 calls. And over 13K of the $325 calls expiring this Friday.
MRNA is no longer an upcoming player in the biotech space. It’s now one of the largest publicly traded companies in the world. That means expectations will be greater moving forward. Meanwhile it almost seems like a perfect storm needed to brew for MRNA’s stock to reach these levels.
Is there still any upside left?
From a technical perspective, MRNA will need to hold $320 and above for a few more sessions. If it can’t, it could see a quick pullback below $300. If it creeps back down to the $250 range, it could be a nice spot to enter a long position.