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Moderna’s stock price soared to a new record yesterday, coming close to the $500 mark. The question is, can MRNA keep climbing, or is a pullback inevitable?
Moderna Inc (NASDAQ: MRNA) surged by $70.75 yesterday, closing at a new record high of $484.47, marking a 17.10% increase.
Moderna is currently thriving, driven by the ongoing global vaccination efforts. The stock has been on an incredible upward trajectory over the past year as the demand for vaccines has increased worldwide. Investors were further encouraged yesterday when Australia became the latest country to approve Moderna’s COVID-19 vaccine, initially ordering 10 million doses for 2021, with an option for an additional 15 million.
Moreover, a study by the Mayo Clinic suggested that Moderna’s vaccine might be more effective than its competitors in combating the Delta variant of the virus. Dr. Venky Soundararajan, who led the study, even suggested that those who received the Pfizer vaccine might benefit from a Moderna booster shot.
This positive news pushed Moderna’s stock price as high as $493.76 before it settled slightly lower.
The stock has seen an outstanding performance in 2021, rising by 365% since the start of the year. This growth is even more impressive considering that MRNA ended 2019 trading at just $19.56.
Moderna is clearly well-positioned to capitalize on its success in the coming years. However, this doesn’t necessarily mean that the stock is a good buy at its current price.
The daily price chart indicates that the stock is deep into overbought territory, with a Relative Strength Index (RSI) reading of 86.45. Under normal circumstances, such a high RSI would suggest that the rally is likely to lose steam soon.
However, given the unique situation of a global pandemic and Moderna’s role in fighting it, predicting the stock’s future is challenging. Even so, there are likely many investors eager to buy if the stock experiences any correction.
The main concern for potential buyers is that the stock could drop by 50% and still be in a long-term uptrend. This makes investing in Moderna particularly risky for those who are not prepared to handle significant potential losses.