Drug stocks have been on fire lately, and over the past few weeks, the two leading covid-19 vaccine makers, Pfizer (PFE) and Moderna (MRNA), have surged
Moderna rallied more than 19% on Tuesday and climbed another 5.8% on Wednesday despite the Federal Reserve’s hawkish tone and the decline in the overall market.
Shares of Moderna are now up more than 78% from the low they made in October.
The latest rally came after “a Moderna experimental melanoma vaccine combined with Merck & Co.'s (MRK) immunotherapy Keytruda reduced the risk of relapse in people with skin cancer in a trial.”
Nor has Pfizer been neglected. Pfizer stock is on pace for its ninth weekly gain in the past 10 weeks. The lone down week came when it slipped just 0.44% in the first week of November.
Like Moderna, Pfizer rallied on Wednesday, climbing 2.7% and hitting its highest level since April. It’s now up 30% from its low in October.
Trading Pfizer Stock
Chart courtesy of Trendspider.com
Pfizer made a low of $41.45 in mid-October, but has been enjoying a strong rally ever since. The low came just above the 200-week moving average and the stock has since rallied back above all its notable daily moving averages.
The bulls shouldn’t be surprised, however, where Pfizer ran into resistance.
The stock hit the $54 to $55 zone, which has been resistance all year long. In addition to that, there’s also the 61.8% retracement and the underside of prior uptrend support (blue line).
Active support comes into play via the 10-day moving average, but investors shouldn’t be surprised if Pfizer revisits $50 and the 21-day moving average. As long as it holds above the 21-day, the bulls are in control.
Above $55 puts $57.50 in play, then a potential push above $60 to retest the highs.
On the downside, a move below $50 and the 200-day moving average should have bulls more cautious. Below $47.50 and the 50-day opens up more potential downside.
Trading Moderna Stock
Chart courtesy of TrendSpider.com
Moderna stock had fallen further than Pfizer did, so it only makes sense that the stock has had a bigger rally off the lows. The news with Merck only adds fuel to the fire.
The stock rallied into its 23.6% retracement and 21-month moving average before slowing down.
From here, I’d love to see it consolidate above the $188 to $190 area and the 10-day moving average.
If Moderna stock can take out this week’s high of $217.25, then we could see a move to $225. If the bulls really take control, $250 to $260 could be on the table.
Below $188 and it's possible we see a gap-fill down toward $175.
