Moderna Shares Test All-Time High Levels

Moderna stock gained huge upside momentum after the stock was included into S&P 500 and continues to move higher. The stock, which has recently traded below the $240 level, is currently trying to settle above the $340 level, having gained more than 40% in just 5 trading sessions.

The recent market worries about the spread of the Delta variant of coronavirus served as an additional bullish catalyst for Moderna shares. Countries rush to secure new doses of vaccines which means that Moderna has good chances to get solid revenue in the upcoming years.

In a latest deal, Takeda Pharmaceutical agreed to supply 50 million does of Moderna’s vaccine to Japan. The extra doses could be supplied at the beginning of 2022. Similar deals may follow as more countries open up to the idea of booster doses, which is bullish for Moderna and other vaccine makers.

What’s Next For Moderna Stock?

Analyst estimates for Moderna’s earnings have not changed in recent days, and the stock is currently trading at almost 19 forward P/E for 2022, which is a major increase compared to 13 forward P/E which was seen at the end of June.

Valuation is getting stretched, and traders should keep in mind that the market does not have good earnings visibility beyond 2022 as the trajectory of the pandemic is not known.

The forced buying from index funds who purchase Moderna shares because they were included into S&P 500 will soon end, and this factor will be out of play.

Technically, RSI is in the extremely oversold territory, and the risks of a pullback are increasing day by day.

All in all, it looks that traders should be prepared for a pullback in Moderna shares due to both fundamental and technical factors. The company’s market capitalization has increased significantly without any increase in earnings estimates, and traders will soon begin to take some profits off the table after the major rally.

For a look at all of today’s economic events, check out our economic calendar.

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This article was originally posted on FX Empire

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