Shares of biotech Moderna (MRNA) were falling Friday on mixed results of flu vaccine mRNA-1010 in phase 3 trial. Let's roll up our sleeves and check out the charts and indicators.
In this daily bar chart of MRNA, below, I can see a sideways trading range market for MRNA. Prices broke out in December to clear the August high but prices have since given back those gains. MRNA trades between the declining 50-day moving average line and the slightly rising 200-day line. Trading volume spiked up in December with the price action but now prices are back below the lows of December putting all those buyers at a loss.
The On-Balance-Volume (OBV) line shows a zigzag pattern following its December zenith. The Moving Average Convergence Divergence (MACD) oscillator turned lower in November ahead of the price high and is now below the zero line.
In this weekly Japanese candlestick chart of MRNA, below, I see a problematic picture. Prices rallied above the rising 40-week moving average line but now prices are close to closing back below it. The trading volume has been light and thus not really attracting institutional buyers.
The weekly OBV line is featureless. The MACD oscillator is above the zero line but poised for a downside crossover and take profit sell signal.
In this daily Point and Figure chart of MRNA, below, I can see a potential downside price target in the $137 area.
In this second Point and Figure chart of MRNA, below, I used weekly price data. Here the chart suggests a price target in the $117 area.
Bottom line strategy: Friday's decline in MRNA could be a bear trap however the weight of evidence from the charts and indicators point to lower prices in the weeks ahead.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.