Is Moderna $MRNA a good buy at $69?

For the last couple of days I kept coming across Moderna stock with a ticker symbol $MRNA. Even had conversations at various chat channels if it was a good buy or not. Then a few days ago I saw the president Trump mentioning on TV that the government put in orders for 100 million vaccines from Moderna. Markets were closed. I immediately wanted to see later that day if it had any impact on the price after hours. Sure enough price went up significantly. However the following day, the momentum didn't continue and price pulled back a bit or remained within the similar price range.

Tonight, as usual before markets open tomorrow I am dedicating some time for stock charts and can't stop thinking about Moderna as a position trade. I normally do not follow opportunity trades based on global economic conditions, crisis, daily news, etc. That kind of research seems to require a lot of work. I prefer charts and small consistent gains on swing trades.

This is not a research report on Moderna or its $MRNA stock, but rather thinking out loudly. However, those who do like researching I would suggest going to finviz.com and looking up $MRNA. They usually have decent list of articles relevant to the asset. @azircon once recommended me this website and it is very useful.

Moderna's market cap at this time is 27 Billion and $MRNA is priced at $69. This stocks went from $20 to $95 in a matter of months since the news that they were involved in developing a Covid-19 vaccine. Their vaccine candidate named mRNA-1273 is among the contestants to come up with a solution to this global crisis. There are many companies involved from different countries to come up with a successful vaccine that can once and for all put end to this madness Covid-19 has brought.

With Russia recently announcing that they are registering a vaccine developed there, coming up with a working vaccines seems to a race now. Once Russian vaccine news broke and Russian president Vladimir Putin vouched for it, even saying his own daughter is among the first users. However, western world has been more skeptical about it, since there isn't any data to verify the success of trials and that Phase 3 trials haven't even been conducted yet. While some countries like Vietnam has shown interest in Russian vaccine, most of the countries reserving to wait and see.

At the same time there several vaccine candidates that are in Phase 3 trials, among which is Moderna as well. It seems different vaccines are using different approaches and different technologies to tackle the problem. In essence, Russian vaccine is on Phase 3 as well. Even though it is sort of approved, they intend to first administer it to essential medical workers and continue with Phase 3 trials concurrently.

Moderna's mRNA-1273 candidate seems to be in a good position at this time. They have concluded Phase 1 trials successfully, and Phase 2 trials seem to be promising. Although I couldn't find conclusive data on Phase 2. It is possible that all data is not available yet. It is important to note that they way this vaccine works is it needs to be given twice with 28 days apart. So now they are on Phase 3 stage with trials involving about 30 thousand humans.

Let's talk about money. The US government has contracts with Moderna and other companies. It looks like Moderna will be receiving 1.5 billion dollars if they deliver a successful vaccine before January 31, 2021. This amount will be lowered 1.2 billion dollars if there are delays. At the same time it looks like this amount is for the order of 100 million vaccines, with a commitment to buy 400 million more. The US government has similar deals with other vaccine candidates as well. Another important thing to mention about the contract is, the government can terminate the contract if they find it doing so will be in the national interest.

The US government seems to have confidence in Moderna delivering a successful vaccine based on 1 billion dollars they granted Moderna to develop the vaccine back in spring. Also, president Trump mentioning Moderna by name and informing the press of the orders. Moderna does seem to be a good buy, but there is a competition and potential for the Phase 3 trials to fail. Let's look at the charts and see if charts can suggest anything.

I normally do not draw tend lines. I am really bad at it and most of the time my trend lines fail. For this occasion, I am making an exception, because trend lines I drew on a daily chart look good on both weekly and 4 hours as well.

I am tempted to take a position trade on $MRNA with reservations. While I do think this can turn out to be a big winner, there are also many reasons to think the stock is over-priced already. I was considering to buy call options instead of the stocks, but they seem to be overpriced as well. I really can't make up my mind what to do. For this reason, I will still buy some and don't overextend. Participation is the word of the game.

Posted Using LeoFinance