Following Up On Moderna (MRNA)
Good trade, bad investment?
Frequent readers of this newsletter may recall that we wrote about Moderna three months ago (Moderna: Have The Shares Finally Hit Bottom?) and had some fun with the people who keep calling for a bottom in prices. At that time, when MRNA poked its head back above $40, we said “As a short-term swing trade, the conditions look good for a quick rebound.” And there was a rebound, though a bit lackluster.
We ended that newsletter by writing that for those thinking more long-term “you might take a small position in the stock now or simply put MRNA on your watch list and wait for more evidence that a meaningful bottom has actually arrived.” Let’s see if there is any evidence yet that the much-anticipated bottom for the stock could be here.
Looking at a 1-year chart, we see that the death spiral continues.
The stock has spent the last six months politely confining itself to a steep downward sloping channel. Except for a few days in November, the rare times that MRNA ventured outside of that channel it still usually closed the day back within its borders.
Some say that THE bottom will come only when there is a total capitulation by the market and the shares completely crash. That might happen, but we do not see it as necessary to reach bottom. The bottom could be revealed by having prices break through the top of the channel, and for alot longer than just part of a day. In this scenario we will likely see a W bottom and the second half of the W may or may not go below the current low point at $30. So don’t jump in right away if/when MRNA spends a few days above that channel.
As awful as this chart looks, it hasn’t been all bad. If you look more closely, you will notice that in the past three months there have been three rallies of 10-20% in a matter of days. This often happens, even for stocks suffering through their own bear market.
Even on Friday, the very last bar on this chart, MRNA was up 5% while the market was having its worst day so far in 2025.