Cambridge, Massachusetts-based biotech firm Moderna Inc. (NASDAQ:MRNA) is focused on creating novel therapeutics and medications by exploiting the potential of messenger RNA. The business began operations in 2010 and quickly became a frontrunner in RNA-based drug discovery and development. Its primary focus is developing novel therapies for cancer, infectious illnesses, and cardiovascular disorders. Moderna is well-positioned to play a pivotal role in advancing medicine because of its robust pipeline of potential medications and cures.
Because of the company’s solid financial footing, expanding market, innovative RNA technology, and promising pipeline, shares of Moderna have been a popular addition to many investors’ portfolios.
Considering Moderna’s financial health, it is clear that the company is in good shape thanks to its increasing revenues and healthy cash flow. Investors should rest easy knowing that the firm has the means to pursue its mission of discovering and implementing effective medicines for patients.
Moderna is a financially stable company, but its stock price fell by 76.88% in 2022. The current dip has produced a strong bearish tone as head and shoulders have formed. A break below the neckline of head and shoulders, which is $166, is likely to trigger a substantial decrease in the price of Moderna stock.
Key price levels for Moderna stock, as determined by this article’s price action analysis, will be discussed.
Stability of Moderna’s Finances
In 2021, Moderna’s sales jumped from $803 million in 2020 to $18.47 billion due to the company’s participation in the worldwide reaction to the Covid-19 epidemic. Sales of COVID-19 vaccination, robust demand, collaborations, and partnerships with government and public health organizations were major contributors to Moderna’s total revenue growth. However, since the fourth quarter of 2021, when Moderna’s sales were at their highest, they have been falling rapidly. Quarter after quarter, the revenue has dropped. Moderna’s revenue for Q3 2021 was $7.21 billion, while Q3 2022 revenue is projected to be $3.36 billion.
On February 23, 2023, the company will announce its financial results for the fiscal quarter that ended in December 2022. Reduced demand for the Covid-19 vaccine as the worldwide epidemic started to wane and rivals ramped up production, and lower demand for the flu vaccine all contributed to the decline in Moderna’s income. Additionally, the corporation had to deal with supply chain interruptions and price pressure from governments and other customers.
Financial revenue is falling quarterly, dragging down the stock price in 2022. Higher inflation and rising interest rates from the Federal Reserve hurt the overall stock market in 2022. Still, the collapse of Moderna came from the severely negative structure. From its low point in August 2019 at $11.54, the stock’s price increased 4211.0% to its peak in August 2021 at $497.49. The strong demand for vaccinations because of the Covid-19 epidemic led to a large price hike.
Stock prices peaked at $497.49 in August 2021 and dropped to $115.03 in September 2022 as the market demand for vaccinations fell. Since a negative price structure has emerged, Moderna stock price will likely continue to decline as the market continues to correct from record highs.
Bearish Pressure Will likely Persist
The recent drop in Moderna’s share price has resulted in a powerful double top, as seen in the chart below, which illustrates the weekly prognosis for Moderna. In August 2021, prices hit an all-time high of $497.49, dropping to a new all-time low of $376.65 in November 2021, forming a double-peak pattern. The period between the two peaks of a double top is also seen as extreme volatility in the stock price. Price formed a reverse symmetrical triangle from January 2022 to January 2023 after dropping too far lower levels.
At the resistance of the inverted symmetrical triangle, the price has doubled back. This double top is predicted to peak twice, first in December 2022 at $217.25 and again in January 2023 at $207.51. This double top’s neckline may be purchased for $166.
If the market falls below the neckline, it may be because traders have sold their holdings after seeing the neckline as a support level collapse. Stop-loss orders are activated when the neckline is broken, adding gasoline to the downward trend. So, another drop in Moderna stock price would occur whenever the $166 was broken. A price break over $166 seems plausible given the double top’s long-term pricing structure. However, the negative outlook would be invalidated if prices rose beyond the line dividing the symmetrical triangle. In this situation, $215 is the midpoint of the symmetrical triangle.
Daily head and shoulders patterns on the Moderna chart support the gloomy view. If the price drops below $166, which marks the neckline of the head and shoulder pattern, we may expect more negative pressure to be unleashed. As a result, the negative prognosis for Moderna would be nullified on a price level over $215. The relative strength index (RSI) is now trading below 50 and is expected to continue falling.
Conclusion
From what has been said above, it is safe to assume that the high revenue that Moderna, Inc. saw in 2020 and 2021 was mostly attributable to the sales and demand for Covid-19. But the company’s quarterly revenue is falling. The current pricing of Moderna is likewise quite pessimistic and suggests more market weakness is imminent.
Also, the neckline of the head-and-shoulders pattern is around $166. Therefore a price drop below that level would signal a selling opportunity. However, the bearish view would be rendered null and void should prices rise over $215 since this level would mark the breakdown of the reverse symmetrical triangle. Market participants should look to sell off Moderna stock during price increases to realize losses.
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