Jim Cramer wrote in a column Wednesday that there is no shortage of bright spots in the stock market, especially in the science and innovation space. Cramer singled out vaccine maker Moderna (MRNA) as one such bright spot. Shares of Moderna have rallied significantly over the past 12 months. Is there more room to rally? Let's check out the charts and indicators.
In this daily Japanese candlestick chart of MRNA, below, we can see the big 2020 rally in the share price and a normal correction of around 50% of the surge in November. Prices are now back above the rising 50-day moving average line. The slope of the slower-to-react 200-day moving average line is also positive.
The On-Balance-Volume (OBV) line declined modestly in December, but looks like it is beginning to firm again in January. The Moving Average Convergence Divergence (MACD) oscillator is close to an upside crossover and a cover-shorts buy signal. This signal could be closely followed by a cross above the zero-line and an outright go-long message.
In this weekly Japanese candlestick chart of MRNA, below, we can see a possible and relatively rare continuation pattern called a "rising three methods" pattern. Most of the candle patterns are reversal patterns and just a few are what we westerners call continuation patterns -- continuing the trend in force before the pattern.
MRNA was in a clear uptrend of white candles in November. In December we can see three red candles, which are acting like a western bull flag pattern. A new uptrend looks like it is starting with two white candles. In addition to these observations we can see a positive slope to the 40-week moving average line and a rising OBV line and still bullish MACD oscillator.
In this Point and Figure chart of MRNA, below, we used daily price data. Here the software projects the $161 area as an upside price target.
Bottom line strategy: MRNA has corrected its big November rally and looks ready to start a fresh advance. Aggressive traders could try to go long MRNA closer to $110, risking to $95. The $160 is our initial price target for now.
