Every week, on Monday morning, I send out my best trade Idea to Bullseye subscribers. After watching the market all week, and doing research over the weekend I send out my favorite trade idea Monday morning. This week my pick was MRNA, and boy is it working perfectly!

MRNA was in a steady downtrend since its highs in November last year. It was looking pretty ugly. But in January, it began to consolidate and traded sideways for 3 months. There is an old trading adage, the bigger the base the longer the space! And this long consolidation is what caught my attention on MRNA. 

MRNA forms a base

Given that MRNA is in the vaccine sector, its future and stock price is dependent on other factors than the general market. It’s not as concerned as other stocks may be about interest rates and unemployment. People will still get vaccines if they need to. 

Over the weekend, I was looking at the Chinese data coming out in regards to Covid and the lockdowns that they’re having right now. I don’t think it’s getting nearly enough play time over here in the U.S as the media focuses on the war in Ukraine. Right now, tens of millions of people are in lockdown in China, and they are not even allowed to leave the house!

I started to think, is that like a leading indicator? Is it potentially another wave of COVID coming here in the U.S? I don’t know, but it can’t be good, thats for sure. Maybe we’ll see more cases across the globe and shutdowns in other countries. What I know is when the fears come, people may turn to the vaccine stocks! If we do see a resurgence in fear or a Covid spike, I want to be in MRNA as I would expect the stock to spike as well, and I want to be in it ahead of the crowd. That’s why I made it this week’s Bullseye Pick!

In addition, there can be a correlation between Google trends and stock price spikes. This is a little indicator I use. As more people search for a product or theme, this can lead to added stock buying, whether it’s from more interest from people who are buying stocks or some type of Hedge Fund algo!  

Key Takeaway:

Google trends can be a way to find out what’s hot and trending in the world, and this can sometimes correlate to increases in the price of related stocks as the theme continues to trend around the world! Higher searches can be a leading indicator. 

Point number 2:

Not only are Covid cases ramping in China, reopening stocks were looking terrible. For example, WYNN was selling off heavily, EXPE was looking weak, PLAY also had a big drop recently, and the airlines (JETS) were also looking weak. The weakness in reopening plays also gave my idea extra conviction! The market always knows first, and this weakness could be focussing weaker demand on recreation due to a possible COVID spike! 

Notice How weak WYNN continues to be

Here is how MRNA traded this week after my call:

Here was my Bullseye pick sent out to subscribers:

MRNA – Bullseye Pick Of The Week

We just saw the market have a serious pullback after a pretty epic rally from the mid-March lows.  

While that didn’t surprise me, the degree the market went up and then back down was pretty amazing to see.  

I don’t think we’re quite done yet to the downside… but getting close!

It is tempting to go with miners, fertilizer stocks, shipping, oil, etc but all of these sectors have had a great run already and I find it hard to believe they will continue to rally without a pause first.

Moderna Inc. – MRNA

So, I am going to go with MRNA as my favorite idea for the week.  

This is a stock that doesn’t necessarily follow the ups and downs of the overall market and can make a move up even if the market isn’t nice to us this week.

I think the Chinese lockdowns are a bigger deal than the market is leading us to believe. When I look at all of the “reopening stocks” they are almost all getting hit lately. 

If there is a resurgence of COVID fear, I think a rally for MRNA would be very likely.  

Even the hint of that should at least keep a bid under the stock and hopefully avoid a major drop this week.

Let’s take a look at how I’m structuring my trade plan:

My Trade Plan:

• MRNA Apr 22 2022 160 Calls near $7.00
• Stop : Close under $148
• Target 1 : $178
• Target 2 : $190

Now my first target is still not hit, so MRNA still has a lot of room to move higher. But boy is this trade idea working nicely so far!