Moderna, Inc. is a biotechnology company that is focused on creating transformative medicines based on messenger ribonucleic acid (mRNA), to improve the lives of patients. The Company’s mRNA medicines are designed to direct the body’s cells to produce intracellular, membrane, or secreted proteins that have a therapeutic or preventive benefit with the potential to address a range of spectrum of diseases. It is developing vaccines and therapeutics for infectious diseases, immuno-oncology, rare diseases, autoimmune and cardiovascular diseases, independently and with its strategic collaborators. The Company develops technologies that enable the development of mRNA medicines for diverse applications. It has created modalities, including prophylactic vaccines, systemic secreted and cell surface therapeutics, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, and systemic intracellular therapeutics. – TDAmeritrade
Moderna Daily Chart
Starting out with our Fibonacci extension tool with the
‘Begin point’(54.85) initial bottom,
‘Middle point’(189.5) initial significant top,
‘End point’(103.5) Significant secondary bottom.
As the extension level begins to widen near the upper extremes (between 100%/161.8%/261.8%)we see MRNA begin to act more volatile.
As represented on the chart, MRNA followed the ‘false breakout’ at the 261.8% Fibonacci extension and began to trend lower.
Following the third attempt at the 261.8%(~$456) level MRNA failed to break above and began trending lower into the below Fibonacci levels.
With a brief moment at the 161.8%(~$321.35) MRNA followed this pause with two consecutive gaps lower. With a secondary bottom set at the 100%(~$238.15) MRNA is looking to turn higher, which coincides with an attempt to recapture the 200d SMA (~$254.57).
Pfizer Inc. (Pfizer) is a research-based global biopharmaceutical company. The Company is engaged in the discovery, development, manufacture, marketing, sales, and distribution of biopharmaceutical products. Its global portfolio includes medicines and vaccines. The Company works across markets to develop wellness, prevention, treatments, and cures. It collaborates with healthcare providers, governments and local communities to support and provide access to healthcare. Its medicines and vaccines provide value for healthcare providers and patients, through the treatment of diseases, improvements in health, wellness. It sells its prescription pharmaceutical products to wholesalers, retailers, hospitals, clinics, government agencies, and pharmacies. In the United States, it sells its vaccines products to the federal government, centers for disease control and prevention (CDC), wholesalers, individual provider offices, retail pharmacies, and integrated delivery networks. – TDAmeritrade
Pfizer Daily Chart
Starting out with our Fibonacci extension tool with the
‘Begin point’(26.35) initial bottom,
‘Middle point’(43) initial significant top,
‘End point’(38.4) Significant secondary bottom.
PFE after the breakout ($40.75) we see a significant rally with an initial top at ($51.86) after the initial peak we see a strong demand zone resting at the prior breakout level near ($40.75).
With a brief moment near the (~$40) level we see a strong bullish resumption to the upside. In this event we are looking for PFE to retest the recent highs at ($51.86)
Moderna (30 Minutes)
The 30-minute chart which represents a short-term trading platform is presented with two notable gap- down zones (light grey region)
After the recent move lower (post-earnings) MRNA has found a short-term bottom at ($210.96) and a secondary bottom at ($221.6).
This price pattern is significant in the short term. Commonly, a low set with a higher low set shortly after, portrays a behavioral change, where buyers are presenting more will to add positions or grow positions near these levels.
What we are looking for over the coming 2 months is whether MRNA will recapture the 100% Fibonacci extension ($238.15) as well as the 100d SMA ($236.26).
Given the recent upwards revisions in Moderna’s earnings along with a significant rise in QoQ revenues, we maintain a strong outlook for future midterm (6-10 months) price performance.
If we see buyers fail to hold these recent lows ($210.96) and sellers begin to accelerate to the downside once again we will revise this analysis and expect significant demand to appear near the consolidation range from early 2021 ($90-$175).
Pfizer (30 Minutes)
A much stronger trend is emerging in comparison with Moderna, after very strong earnings PFE has based at ($43.31) and gapped into the 50%($46.72) this indicates a very strong behavioral shift.
Our analysis for Pfizer is much less in need of heavy due diligence.
In such a strong earnings response, in the short term, we often like to let buyers exhaust the upside potential.
As Pfizer reaches the ($50) level once again we can expect to see some unloading of previous supply, and profit-taking.
Beyond the short-term trading signals, we expect Pfizer, on the back of strong earnings and strong indications future earnings will be just as notable, will continue this upside momentum.
Between Moderna and Pfizer we can see an obvious divergence, where MRNA has continued to trend lower at the same time PFE has gained traction.
As both names are making a majority of their revenue with relatively the same product it is notable to point out the confidence of shareholders for each company. One being weaker than the other in the face of relatively the same global environment.
Coming into the next few months we will be tracking the relative price performance of each stock. Given their similarities we would expect a similar trend, the fact we are seeing such a large divergence should cause a pause in that line of thinking.
We want to maintain that there is a significant investment risk for all stocks mentioned by AtticusLLC. That rule applies with significance here, as the short term price may not reflect the fundamental value of each investment, nor does the current price acknowledge the risks involved.
8/21/50/100/200dSMA: The Simple Moving Average is calculated by summing the closing prices of the security for a period of time and then dividing this total by the number of time periods. Sometimes called an arithmetic moving average, the SMA is basically the average stock price over time. As a trend develops, the moving average will slope in the direction of the trend, showing the trend direction and some indication of its strength based on the slope steepness.
Fibonacci Extension: Fibonacci extensions are a combination of Fibonacci retracements with other analyzing techniques. This drawing consists of the trendline, the extension line, and Fibonacci retracements.
An example usage of this drawing is analysis of recent swing points. It is suggested that the begin point of the trendline be placed at a recent Swing Low, endpoint at recent Swing High.The extension line starts at the endpoint of the trendline and can be plotted to any point of chart, though, the general idea is to finish it at the next Swing Low or the begin point of the trendline. The lines of Fibonacci retracements might serve as support/resistance levels.
False breakout: False-breakouts are exactly what they sound like: a breakout that failed to continue beyond a level, resulting in a ‘false’ breakout of that level. False breakout patterns are one of the most important price action trading patterns to learn, because a false-break is often a very strong clue that price might be changing direction or that a trend might be resuming soon. A false-break of a level can be thought of as a ‘deception’ by the market, because it looks like price will breakout but then it quickly reverses, deceiving all those who took the ‘bait’ of the breakout. It’s often the case that amateurs will enter what looks like an ‘obvious’ breakout and then the professional’s will push the market back the other way
ATR: The Average True Range (ATR) study calculates the average true price range over a time period. True range is the greatest of the following:
The difference between the current high and current low
The difference between current high and previous low
The difference between the previous close and the current low
MACD: MACD (Moving Average Convergence/Divergence) is an oscillator study that is widely used for the assessment of trending characteristics of a security. Calculated as the difference between two price averages, this indicator also provides a signal line, an average of that difference. Crossovers of the MACD plot and the signal line often produce valuable signals for trend analysis.
RSI: The Relative Strength Index (RSI) is an oscillator that rates the strength of a security on a scale from 0 to 100, comparing magnitudes of its recent gains and losses. By default, Wilder’s moving average is used in the calculation of RSI, however, you are free to select a different type of average in the input parameters.
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About the author: Liam Hennessy
With 5 years of trading experience, Liam intends to share his insights and knowledge with anyone who seeks to learn more about trading and utilizing technical analysis to improve their market research capabilities.