How to trade Moderna ($MRNA) now? I’d buy it higher…not lower. (December 02, 2020)
MRNA
I want to talk about Moderna ( NASDAQ: MRNA ), and this is why: I wouldn’t buy this stock here. I am serious about this, the only place I would buy this stock wouldn’t be at 143.20, it would be right up here and here’s why: You know the story on Moderna ( NASDAQ: MRNA ); it’s a biotech company, a vaccine for COVID, emergency approval, etcetera, etcetera, so that’s all good.
The problem, of course, is that the stock first broke out back here and ran clear up to here. The last time I checked, a move from $75.00, $77.00, up to 177.00, that’s a pretty good move, especially if it happens within a month. So when we get this kind of gap up and then a reversal, then you have to look at this and say, okay, well that’s the last of the Mohicans.
The last buyers came in yesterday, that was that. They bought the stock, stupidly, but what are you going to do? They bought the stock and the stock was immediately sold. So what happens to all of those people? These are now losers, and that’s not a pejorative term, I mean that all of these folks that bought, and this was just yesterday on the 1st, they are not happy that they own this stock. They are upside down, some of them by a lot.
And so as the day goes on, as the days go on, this is a 15-minute chart, you are going to see more and more of these people selling their stock, they are kind of going to be selling into this. Any kind of buying, they are going to be selling into this and that is going to make the stock, we will go back to the daily, that is going to make the stock really heavy, certainly around 150.00. But even if the stock breaks through 150.00 remember you have still got all of this mess up here.
A lot of reluctant and ticked off bulls own this stock and now they are not bulls, they are kind of bears and they just want out. That is why I look at this at 143.00 and I am thinking, you are buying the stock from somebody who is selling it and they are not happy about it. But on the other hand who’s in front of you? Who is ahead of you? It is all of these traders who wish that they were out of the stock.
That is why I say, rather than buy it at 143.00 I would rather buy it at 178.00. Even though that’s what, 23, 24 percent higher than it is right now? The reason I would wait to buy it up there is, if the stock breaks out above yesterday’s intraday high of 178.50 everybody is a winner. Winner, winner chicken dinner; who’s ahead of you? Nobody is ahead of you saying I can’t wait to sell my stock and break even.
There are a lot of people beside you; folks that ultimately like you are going to take profits. But when you get rid of this ceiling, when you get rid of all of these sellers, they’re done. The reason you know they’re done is because the stock is moving above those levels; once you get above there then it’s all green. All it is, we can say blue sky, you’re looking at a green background, whatever. We can look at this and say, that is when I want to own the stock.
Now, I know what you are thinking, well, I could just buy it here, hold it, and then when it breaks out above here then I will buy some more, and then I will really make a bunch of money. Okay, well here’s what’s wrong with this, you are saying when the stock breaks out. What if it doesn’t do that? What if it falls all of the way back to here? If this thing fell back to $100.00 and held it would really still be okay. You would just look at the stock up here and then anybody who understood trading would look at all of the folks here and say, wow, I bet they sure got hosed, I’ll buy the stock down here, so the stock could fall quite a bit.
The other thing is, if you are looking to do this, then you are also deciding that what is more important than making money is you being right. All I want to do is make money, the easy money, if I can make 5 percent, 10 percent, 50 percent. I don’t care where I make that money from. I don’t care if I make it up here or if I make it here. The only thing is, this is easier money to make than this.
So that’s all I have got for you; I’m telling you how I would trade Moderna ( NASDAQ: MRNA ). To put it another way, this trade is over for the time being, you’re done. Just get out of it. Even it the stock runs up to new highs I will tell you that this is still the right call. I can’t predict but I can manage risk and this is risk management, you’re done.
You need to wait for the stock to regroup. Don’t be the lemming that sits there for too long while everybody else is selling this stuff. What good news can come out that is not already news and is it enough to push the stock to new highs? I am kind of thinking that it’s not.
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