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PreMarket Prep Stock Of The Day: Moderna

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PreMarket Prep Stock Of The Day: Moderna

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Click here to listen to Today's PreMarket Prep Podcast 

As a result of the COVID-19 virus, several biotech companies have had huge gains in their share price after developing vaccines. One of the best examples of this is Moderna Inc. (NASDAQ: MRNA).

The Company: Moderna is a commercial-stage biotech that was founded in 2010 and had its initial public offering in December 2018. The firm's mRNA technology was rapidly validated with its COVID-19 vaccine, which was authorized in the United States in December 2020.

Moderna had 24 mRNA development programs as of early 2021, with 13 of these in clinical trials.

Volatile Off IPO: Moderna made its debut on Wall Street in 2018 at $22 and peaked in its inaugural session at $22.75 and reversed course. During a stretch of nine days (Dec. 13-26), the issue was lower in all but one of those sessions, swooned to $13.03 on Dec. 26 and began to move higher.

That rally peaked in April 2019 at $29.79 and the issue was cut in half by August, bottoming under the initial IPO ($13.03) at $11.54. A rally into year-end took the issue to $19.56

Incredible 2020: Moderna backed off in the early months of 2020, putting in a pair of monthly lows just under $18 ($17.68 in January and $17.91 in February). However, astute biotech investors took notice of the company's potential as it went opposite of the broad market in February, ending the month higher by more than $5 at $25.93.

In an extremely volatile fashion, the issue ebbed and flowed with positive announcements on a vaccine for COVID-19 and was subject to vicious pullbacks after major rallies.

The best example of this would be its price action to end 2020. After making a new all-time high ($153.87) in November and ending the month at $152.74, it lost a third of its value to end the year at $104.74.

Huge Ranges In 2021: The issue found support just under the yearly close at $103.26 in January and peaked later that month at $185.98. A two-month retreat took the issue to $117.34 in March and rebounded to end the month at $130.96.

The issue is now in the midst of a four-month win streak, which is its second-longest monthly winning streak as it started 2020 with a seven-month win streak.

Icing On The Cake: Ahead of Friday’s announcement that the company would be added to the S&P 500 index, the issue was higher in five of its last six sessions, rallying from its July 7 close ($221.90) to a new all-time high earlier in Friday’s session at $288.88, which is nearly $27 higher than its former all-time high made on Thursday at $261.22

As of 12 p.m. ET, it has backed off that high and is attempting to remain in the $280 handle.

Moving Forward: Based on its past price history, a majority of its spikes higher eventually have given way to some major profit-taking in a volatile manner. However, those declines were based on drugs in the pipeline as opposed to a one-time event such as being added to the S&P 500.

Since the news has instigated a gap and go in the issue and a breakout far above its former all-time high, it's hard to predict when or if the rally will stall out. For investors not trying to pick the top on the upswing and prefer to get taken out on weakness, a breach of the current low ($271.50), will put the issue in an area with no past price history until the top of Thursday’s range ($261.22).

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