Here’s your trade on Moderna ($MRNA) (July 07, 2020)
MRNA
Just a real quick analysis of Moderna ( NASDAQ: MRNA ) here, it’s a biotech stock. This is still a little early, which are the things that I like to look for, for videos because I don’ t like to talk about the, you should have been here this morning trades. I would rather be talking about the, keep track of this and this is what you do when such and such a thing happens trade. That’s a better trade because it helps you make money.
What I am looking at here is this; you might remember this if you are actively trading. A huge rally here and then a huge correction, and then since that it has rebounded over the last several weeks. The stock has just been kind of gently drifting down while at the same time the 50-day moving average is coming up to greet it. And then now we’ve got this little support level here though the stock is still below the 50-day moving average.
Now, if it wasn’t for this big sell-off here, where the stock on heavier than average volume really fell, and that is kind of a lot, 27 million shares traded that day. Where I’m from, that’s a lot of anything. So that makes me feel like maybe we’ve got a little resistance still for the stock to chew through. But I like the relatively low risk here. There is about 8 percent from the ultimate low back here.
What I would suggest doing is, watching the stock, see how it trades tomorrow. Today the low was 57.44, that is right here, that was the low. You can use that as a reference for a stop. You don’t have to let it go all the way down here; because if you are buying the stock, and I would suggest watching it for a few days, I just don’t get the sense that it’s going to do this tomorrow.
Watch this stock because if it starts to kind of run-up along here what you can really look at it doing as far as kind of the way you look at charts is, it’s forming the left side of the base down here; a little drift lower on weak hand profit-taking. And then it is forming the bottom of the base, which is what we are looking for. And then at some point you want to see this stock start to climb out the right side.
This is really something that William O’Neil has explained in his books; but the guy who really took it to the next level is Mark Minervini in his books. He is written a couple of excellent books on trading, books that I have actually taken extensive notes on and I read those notes on a fairly regular basis. If you haven’t read those books I have got to tell you, you are totally missing out. And if you say you are so good that you don’t need them, then you have got a bigger problem than that.
Anyway, what I am looking at here is, it is typical Mark Minervini fashion, this is a type of thing that kind of concerns me because of the high volume but I like to see the stock setting up along this key moving average. If it would only hold here a little bit longer you could be starting to buy it here.
That’s the way I am looking at Moderna ( NASDAQ: MRNA ). They don’t report earnings for a while, almost a month, so the stock does have plenty of time to complete this basing pattern and then start moving to the upside.
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