The big story in biotechnology this past week has been the rise and fall of Moderna Biotechnology (mRNA) stock. As explained in a previous Moderna Inc Biotechnology stock longs 2020 post for the weekly timeframe a few days ago, we were expecting Moderna Biotech (MRNA) to retrace to a weekly imbalance of around $20, and that’s exactly what it has done.
The new coronavirus is affecting Moderna Biotech (mRNA) positively since they have been working on the creation of a cure and vaccine for coronavirus. Even if the vaccine Moderna Biotech works, there’s no real business model for vaccines that treat emerging viral threats like coronavirus. This is one of the major reasons why the pharmaceutical industry has generally not focused on these viruses. It is far from clear that Moderna could ever make money from its Covid-19 vaccine. I read from its CEO that the company wasn’t focusing on the commercialization of the vaccine; he said that the company’s only focus was public health.
That said, look at what happened to Moderna Inc (MRNA) stock once the price hits a strong weekly demand imbalance. It kissed the level and reacted very strongly to it. Moderna stock price has moved 80% ever since; that’s a lot. See Moderna Biotech stock analysis in the screenshot below. The trade has already happened as expected; now it’s too late to buy Moderna Biotech.
We did not need to consider any earnings or events, we knew there was a huge imbalance, and that’s exactly where we were interested in buying Moderna Biotech (MRNA) stock.
This is the kind of price action technical analysis you will learn in our trading community. You will learn how to locate new supply and demand imbalances and trade without using any indicators, no news, no fundamental analysis, no earnings announcements, no volume or VSA analysis. Just supply and demand imbalances.
Trading supply and demand imbalances are ideal for beginners and those with a full or half-time job; you won’t need to stay in front of the computer all day long trying to move price action with your mind.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and react strongly to those imbalances. Why do you see positive earnings, then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances in gaining control.
You should not worry about fundamentals or earnings announcements unless you do very short-term trading and scalping.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has a name, and it’s called the waiting game. We must patiently wait for the correct scenarios and setups to happen and wait for the price to pull back or dip into the price levels we want to trade; in our case, these prices are made of supply and demand imbalances.
There are several ways of buying stocks and futures. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy a CFD (contracts for difference) if you are in a country where it’s allowed.
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