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June 26 Chart of the Day - Moderna

Shares of the pharmaceutical company Moderna, Inc. (MRNA) are trading higher today just days after submitting an application to the Food and Drug Administration (FDA) for the authorization of an updated vaccine.  One analyst that follows the company upgraded the rating for Moderna from Neutral to Buy, while reducing the price target from $221 to $191.

But after opening today at $118 and change could this upgrade be premature?

From a price action technical analysis perspective maybe yes...

Using just support/resistance and trend one can see that the stock price has been making a series of higher highs and lower lows since the first of the year forming a "megaphone chart pattern."  Typically when this pattern emerges on a chart virtually all price action within the megaphone could be considered "noise."  Meaning that until price breaks out of it one way or the other traders and investors could be faced with what may appear to random or sudden movements in either direction.

That's not to say that successful trades or investments can't be made in the interim but more times than not it's best to let the chart reveal which way it wants to go.

To the downside, big round number $100 could be a psychological level for the chart and it also represents the bottom trend line where support is also in the area.

To the upside, price would have to break above and hold both $185 then $210 to even think about approaching the upper trend line.

And if history is any indicator, it's important to note that Moderna's price can move aggressively up or down over a short period of time.

So what's next?

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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