I reviewed the charts of vaccine maker Moderna (MRNA) on Sept. 13, when I wrote, "I would look for shares of MRNA to trade sideways for several months. The base-building phase is often drawn out and frustrating." The stock price of MRNA declined sharply Monday as traders reacted to reports that Pfizer (PFE) anticipated a diminished demand for its latest Covid booster, so let's check out the charts of Moderna again.
In this updated daily bar chart of MRNA, below, I can see that prices failed to sustain an advance above the declining 50-day moving average line. The trading volume shows an increase in recent sessions as prices tested the 50-day line, telling me that technically oriented traders are focused on this lagging indicator. The daily On-Balance-Volume (OBV) line has been in a decline since December and looks like it has recently made a minor high. The Moving Average Convergence Divergence (MACD) is slightly below the zero line.
In this weekly Japanese candlestick chart of MRNA, below, I see a weak picture. Prices trade below the declining 40-week moving average line. The weekly candles are mostly red (bearish) and I do not find any recent lower shadows. I fail to see an increase in the weekly volume histogram, which tells me that investor interest largely is lacking. The MACD oscillator is bearish.
In this daily Point and Figure chart of MRNA, below, I can see Monday's decline (a column of O's) and a possible downside price target in the $91 area.
In this second Point and Figure chart of MRNA, below, I used weekly price data with a five -box reversal filter. Here the software suggests a potential downside price target in the $34 area.
Bottom line strategy: On a personal note my wife and I are planning on getting the Moderna booster when it is available at our local drugstore. As a technical analyst I would remain an observer of the charts of MRNA until a bottom pattern plays out at current levels or the lower levels that the Point and Figure charts suggest.
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