Trading Novavax after Breakout

2021년 3월 12일

NVAX jumped roughly 20% overnight after announcing 96.4% efficacy against the disease caused by the original COVID-19 strain. This single move caused the shares to break out from the downside channel and crack through the 50-day and 20-day moving averages. With this important resistance zone left behind, the shares are poised to open just above the yearly Fibonacci R2 and monthly S1 levels ($216 and $213; RY2 and SM1 lines on the chart).

The question is whether the bulls can push the stock even higher today. Personally, I do not rule out that such a powerful upside gap - amid broader market concerns - could trigger some profit taking. Therefore, I will be watching to see if the stock can hold the RY2 / SM1 zone. If this happens, we can see NVAX approaching the $250 zone followed by the monthly pivot level ($258, PM) near-term.

On the downside, a break below RY2 / SM1 will put the 20- and 50-day moving averages to the test. An even more bearish scenario involves retesting recent diagonal resistance and potential gap filling at $188. This zone, however, should serve as very strong support, where we will definitely see buybacks.

2021년 3월 12일

노트

The bearish scenario is unfolding. NVAX tried to break above RY1 but ultimately failed. It has lost the SM2 level, has broken below the 20-day EMA and looks set to retest the 50-day moving average.