The last update on Moderna, here, said that price action had slammed into resistance.
The chart shows that MRNA, has gone from resistance. to wedge, to measured move.
With the S&P and Qs, stalled at all-time highs, SOXX, DIA, XLF, IYR well off their highs with the biotech sector in an apparent reversal, one has to wonder what’s next (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
One by one, each sector appears to be topping or reversing.
This time, it’s biotech.
Analysis (and action) over the past year has been on again, off again and now, appears to be back on again.
However, this time we have (as we’ll see below) a near perfect Fibonacci correlation.
Biotech Sector Index SPBIO, Daily
First, the big picture.
The corrective retrace that started way back in late October, of last year.
Next, we’ll get in closer to show the exactness of the Fibonacci levels.
It hardly ever works out this perfectly, but there it is.
Change Horses?
It’s no secret, the focus of trading action on this site since mid-October, has been to short semiconductors, potentially the largest bubble (A.I.) in world history (not advice, not a recommendation).
However, biotech may get its comeuppance as well with information like this, this and this hitting the mainstream.
The decision to take action or not, remains open (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Moderna, MRNA, is down -88%, from its all-time highs.
Having worked the markets for nearly forty-years, it (typically) goes as follows …
When a stock declines 80% or more, in short order (12-36 months or so), those with absolutely no analysis skills or discipline, who bought-in because everyone else is doing it (making a supposed fortune), have now lost their shirts.
So, they do what they know best, blame somebody else. Let the lawsuits begin.
The whole thing is so much like High School.
Class action is nothing new. What is new this time around, or what could be new, is the ‘discovery’ process.
One has to wonder if (or when) the lawyers are going to come across this piece of ‘discovery’.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
For a clue to the (potential) answer, we can look at what’s happening to Pfizer, link here and here.
However, let’s not get ourselves wrapped around the axle on events, forecast years ago.
Rather, let’s go straight to the truth, the price action and see what it’s telling us.
Moderna MRNA, Weekly
The entire move from low to highs is shown. Included on the chart, are two Fibonacci indicators.
One is the standard ‘retrace’ indicator; the other, is a ‘projection’ indicator.
The ‘projection’ is based off the ‘a-b-c’ move from the lows of November 2nd, 2023, to the highs on May 24, 2024.
The retrace and projections are hard to see, so the ‘Detail‘, arrow is where we’re headed next on the daily.
Moderna MRNA, Daily
If there ever was a chart to once-and-for-all, refute, dismiss, trash, the whole ‘Fundamentals’ argument, that earnings, interest rates or some other ‘Voodoo economics’, moves prices, this is it:
MRNA, price action hit the 23.6% retrace level (exactly) for two days before moving on to hit the 161.8%, projection (exactly) before reversing.
Note the ‘100%‘ level as well; price action confirmed this area (exactly) three times! Once on the way up and two times on the way down (third time, not shown).
A century ago, Livermore said, ‘It’s all about the numbers’.
Strategy, First
Just as Livermore was primary a strategist, so is this site’s method of analyzing the markets, i.e., Strategy, Tactics, Focus, in that order (not advice, not a recommendation).
The news has been replete with reports like this one and this one.
Another panic ahead?
Sounds like it but at least in the case of Moderna, the chart itself says (effectively):
‘There’s no money in it’.
That means, another wave like we saw several years ago, is not the most likely future event (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
With today’s heavy downward action, as we head into the close, any number of scenarios could play out.
Work has already been done on INTC, KMX, MRNA, Biotech Leveraged Inverse LABD, and others.
With such a decisive push lower, there could be some kind of short covering late in the session.
For example, as of this post 2:15 p.m. EST, KMX (detailed below) appears to be coming off the day’s lows.
CarMax Weakness
The daily chart has KMX, right a the bottom of a trading channel.
Price action may continue to rebound from this area heading into the close or not.
If there’s a rebound, naturally Put options will begin to decay in value … a desired outcome if one is looking to enter short (at the cheapest price possible).
The bottom of the channel line could be all there is for this week or we could be heading to much lower levels.
It’s up to the trader/speculator to decide (not advice, not a recommendation)
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
With that understood, we’ll present three potential scenarios for Moderna (MRNA) price action for the upcoming days, or week(s).
When we last left our chief cook and spike-protein injector, price action was in a downtrend but also in Wyckoff spring position; indicating at least a chance for upside.
As with the CarMax (KMX) analysis, still playing out with Scenario No. 2, and/or No. 3, at this link as the forecasted price action, we’ll show potential Scenario No. 1 – No. 3, for MRNA, below.
Moderna MRNA, Daily, Forecasted Action
Scenario No. 1
Upside wedge breakout
Scenario No. 2
Downside wedge breakout with no test
And now, the most probable, ‘If there’s a downside breakout.
From a short-dated options standpoint, Scenario No. 3, is the most desirable (not advice, not a recommendation).
If there’s a downside breakout with no test, there’s always the possibility at some point, there will be a test, which in turn completely wipes out any potential gain in the (put) trade; time would run out and the option expires.
Re-Visiting, Elder
Recall, in the example that Dr. Elder gave, he bought OEX Put Options at 3/8-ths, back in the day when the markets traded in fractions.
Three-eighths is 0.375, which gives a target value on which option to select (not advice, not a recommendation).
To get to that small of a fraction, the option’s either way out of the money, short on time, or both.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
