Moderna Inc. (NASDAQ:MRNA) and Novavax Inc. (NASDAQ:NVAX) were trading down over 2% and 4%, respectively in the premarket Friday despite both stocks showing signs a bounce could be in the cards.
The weak price action in the pharmaceutical giants is likely due to very bearish action in the general markets, which saw the S&P 500 looking to plunge 1.35% to start the trading day and end a bearish week.
Moderna and Novavax, both COVID-19 vaccine developers, have also been pressured by comments that President Joe Biden made on Sunday, declaring the Covid-19 pandemic is over.
Now more than 30 months since the pandemic officially started, the U.S. has logged a total of almost 96 million Covid cases and over 1 million deaths. New positive cases have been trending lower but are still measuring in at about 54,000 per day, according to the Centers for Disease Control and Prevention.
Without positive sentiment in the pharma sector, Moderna and Novavax are susceptible to the same long-term bear cycle that has gripped the markets for most of 2022. Although short-term bullish cycles always occur in wider bear markets, bullish traders are usually best to watch for small bounces until the general market shows signs a larger reversal to the upside is in the cards.
There are a variety of tools one can use for technical analysis, including from Ninja Trader. Ninja offers advanced charting and other products as part of its trading suite that are designed to assist investors with navigating the markets. The platform allows its members to automate and execute trades and to test trading ideas through simulation.
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The Moderna Chart: Moderna has been trading in a fairly consistent downtrend since Aug. 4, when the stock attempted to regain the 200-day simple moving average and failed. Moderna’s most recent lower high was formed on Sept. 14 at $141.82 and the most recent confirmed lower low was printed at the $123.69 mark on Sept. 19.
- On Thursday, Moderna printed a doji candlestick, which indicated the stock could trade higher on Friday. A doji, when found in a downtrend, can indicate a reversal but it’s a lagging indicator, meaning Friday’s candlestick would need to print for verification.
- If Moderna continues to plunge lower over the next day or two and falls to the 52-week low of $115.61, another bullish reversal candlestick, such as a doji or hammer candlestick, may form near that level. Eventually, Moderna will pop up to print its next lower high.
- Moderna has resistance above at $134.57 and $147.57 and support below at $122.01 and at the 52-week low.
- A falling channel pattern is considered to be bearish until a stock breaks up bullishly from the pattern. In bear markets, however, stocks sometimes break down from a falling channel, which can indicate a stronger downtrend is on the horizon.
- Novavax has resistance above at $26.10 and $40.98 and support below at $17.71 and $11.71.
