Yesterday, the US Food and Drug Administration discontinued use of the Johnson & Johnson (NYSE 🙂 single coronavirus vaccine when a rare blood clotting disorder developed in six women, ages 18-48, and one died. Following the announcement, Moderna (NASDAQ 🙂 quickly and adequately defended its own vaccine, which the company says uses a different technology.
While the FDA was cautious in its language, calling the stop a "pause," it could seriously setback the Biden administration's continued efforts to ramp up vaccination efforts across the country as the Inoculation stocks are likely to decline. short-term. In addition, this setback could convince people who are already uncomfortable about the vaccines not to vaccinate at all.
After the J&J news became known, something changed. Markets hit JNJ and AstraZeneca (NASDAQ :), whose vaccine also causes worrying side effects in a small number of recipients. Shares of both pharmaceutical companies fell on Wall Street yesterday.
Ironically, we wrote about Pfizer (NYSE 🙂 on Tuesday for this column, before the JNJ hiatus was announced. In our view, Pfizer's fundamental and technical prospects were the strongest among vaccine competitors at the time
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Conversely, Moderna, outperformed all competitors, gained 7.4%. The benefit looks like it may be just getting started too.
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After the stock fell for a few days in late March to fall under an upward channel, the price rebounded sharply. There it found clear support at the bottom of the pattern.
The price drop was structured within a declining channel, but that quickly turned into a declining wedge, bullish after the 86% slingshot that occurred in less than 15 weeks prior to the wedge. This is considered a continuation pattern as it shows how, despite the overselling – which is understandable after an incredibly profitable run illustrated by a faster declining trend line – buying was able to support the price represented by a slower declining trend line. This indicates that once supply runs out, demand will carry prices higher.
The target of a falling wedge is the top, which is consistent with the expectation that a price bouncing off the bottom of an ascending channel will retest the previous height towards the top of the channel.
Trading Strategies – Long Position Setup
Conservative traders should wait for a return movement to make sure there is enough demand to push prices back up.
Moderate traders would wait for the same withdrawal for better access, if not the additional confirmation.
Aggressive traders could enter at will, as they understood the increased risk of less evidence of the uptrend as the price to be paid for a higher reward for getting ahead of the rest of the market.
A trade plan is essential; here's an example of a simple one:
Trade Sample
Entry: $ 150
Stop Loss: $ 130
Risk: $ 20
Goal: $ 210
Reward: $ 60
Risk: Reward Ratio: 1: 3
Author's Note: This is an example only. There are several approaches to this trade. We selected a price that never existed for a purpose to justify the risk. A trader could wait for a dip, to limit the exposure of the supposed demand to the pattern, or move his stop closer, but without as much support. The risk in the former is missing out on the trade if there is no corrective deterioration; the danger in the latter is that it is held back for lack of support.
You must develop the style that suits your timing, budget and temperament. Until then, take small risks to learn and gain experience. Don't kid yourself that you can make a quick profit right away. If you do, you will learn nothing, but you may lose your shirt.
