I always try to make my trading as simple as possible. I often ask myself, “What’s a product that everyone is currently using that has the potential to drastically change people’s lives?” Last year, Zoom was a great example of this as it was the go-to video conferencing app for millions around the world who sought to stay in touch with colleges, friends, and family during the COVID-19 pandemic.
This year, I believe Moderna is a stock that most resembles Zoom in 2020. Just like Zoom was essential to stay in touch with friends and family last year, many cities such as New York are requiring people to show proof of vaccination in order to enter gyms, restaurants, or other large venues. In addition, many employers are requiring their employees to get vaccinated in order to stay on the payroll. All of this bodes well for Moderna which seems to have the most effective COVID-19 vaccine.
Last quarter, Moderna produced triple-digit earnings and sales growth as millions around the world got vaccinated. Strong earnings and sales are likely to continue throughout the remainder of 2021 as more and more people choose to get vaccinated in an effect to gain some level of normalcy in this COVID-19 world. MRNA also has some positive supply and demand features as management owns 19% of Moderna’s shares. Moreover, fund ownership has steadily been increasing this year as MRNA’s addition to the S&P 500 caused many funds to begin buying it.
I initially bought Moderna as it broke out above the $190 range, but sold it up 45% and thus missed a large chunk of its’ latest move. However, when I sell a stock with fundamentals as strong as Moderna, I always make a note to keep it on my watchlist in case it sets up again. MRNA looks to be doing just that. While looking at its’ chart, Moderna is forming a tiny cup and handle pattern. However, it is also exhibits "high-tight flag" type action as it more than doubled from $190 to over $400 quickly, and then consolidated in an extremely constructive manner. I particularly like the consistent support MRNA has seen above the 10-week line over the last few months followed by the tight action over the last few weeks. All of this is a clear sign of institutional support. I will be monitoring MRNA extremely closely over the next few days for an entry point.
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