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Moderna share price: positive Oxford vaccine and JPMorgan downgrade hit stock price

Moderna's share price has slumped after JPMorgan downgrades the stock to neutral. A positive early trial for rival AstraZeneca's Covid-19 vaccine response is adding to pressure on the stock.

Vaccine Source: Bloomberg

Shares in Moderna are trading lower by more than 10% (at the time of writing) after JPMorgan downgraded its outlook on the stock, citing valuation concerns. The bank has lowered its rating from overweight to neutral as the drug maker continues to compete in the race to find a vaccine for Covid-19.

In a note published on Monday, JPMorgan wrote that ‘this stock move itself isn't entirely surprising given the rapid execution on mRNA-1273, the tremendous widespread investor interest on this program, and the obvious unmet need/opportunity for a Covid-19 vaccine,’ adding that ‘at these levels we are having difficulty justifying more upside given the uncertainty of the duration/characteristics of the Covid-19 pandemic.’

Moderna: technical analysis

Moderna has gained more than 385% since the rally began in February. Price action gapping higher in mid-July, combined with the RSI indicator pushing above 70, both forewarned of potential consolidation with the rally beginning to look overextended, particularly with the break above key resistance at the May peak.

On top of that, overstretched differentials between the price and the simple moving averages (SMAs) also pointed to a possible reversal.

Today’s price action has seen the stock push back below $86.98, which is now a key resistance level to watch. Nonetheless, the price still remains a considerable distance above its ascending trendline of support, suggesting the overall bull trend remains intact.

The next key support level to watch is at the psychological $80.00 mark. In terms of resistance, look out for the peak on the IG platform at $94.99, with a break above $95.00 acting as a strong bullish signal.

Positive early results for AstraZeneca's Covid-19 vaccine

Elsewhere in the sector, data released on Monday showed that an early trial of AstraZeneca’s coronavirus vaccine, developed with scientists at the University of Oxford, was deemed to be safe and induced an immune response. The results, which were published in the Lancet medical journal pointed to no serious side effects.

Sarah Gilbert, the vaccine developer, said: “There is still much work to be done before we can confirm if our vaccine will help manage the Covid-19 pandemic, but these early results hold promise.”

Shares in AstraZeneca are trading higher by 4% (at the time of writing) on the back of the announcement.

Moderna price chart Source: IG charts
Moderna price chart Source: IG charts

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