Moderna Inc. (NASDAQ: MRNA) seems to be poised for a price surge as per its latest charts. The company discovers, develops, and commercializes messenger RNA therapeutics and vaccines for the treatment of infectious diseases, immuno-oncology, rare diseases, cardiovascular diseases, and auto-immune diseases in the United States, Europe, and internationally.
Bullish Indications
#1 Consolidation area: The daily chart shows that the stock was consolidating within a price range for the past few weeks. This area is marked as a pink color rectangle. The stock now looks poised for a breakout from this consolidation area.
MRNA – Daily Chart
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA, indicating that the bulls are still in control. This is a positive indication.
#3 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has started to move up from below the –DI and +DI lines. This indicates possible bullishness.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#5 Bullish RSI: In the daily chart, the RSI is currently above 50 and moving higher. This is a possible bullish sign.
#6 Falling Wedge Pattern Breakout: As you can see from the weekly chart, the stock was forming a falling wedge pattern for the past few weeks. These are marked as purple color lines. The stock has currently broken out of the falling wedge pattern and looks poised for an upmove. A falling wedge is a bullish pattern and a breakout from it implies that the stock may move higher in the short term. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are firmly in control.
MRNA – Weekly Chart
#6 MACD Above Signal Line: In the weekly chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#7 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of MRNA above the price of around $201.10.
TP: Our target prices are $233 and $250 in the next 4-6 months.
SL: To limit risk, place stop-loss at $185.00. Note that the stop-loss is on a closing basis.
Our target potential upside is 16% to 24% in the next 3 to 6 months.
For a risk of $16.10, our target rewards are $31.90 and $48.90. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the consolidation area with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
Tara
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