Novavax, Buy or Sell right now?

7 January 2022, 4.00 pm (GMT+8)

Nikhil Parmar

Novavax(NVAX) plunged to a 3 week low yesterday with NVAX prices closing at 157.80USD a share. This gap down saw NVAX lose 19.45USD, a loss of 10.97% in a day. This was primarily caused by bearish sentiments amongst investors with regards to the future of Novavax. Novavax is expected to file for emergency use with the United States Food and Drug Administration this week and bearish sentiments amongst investors as to the outcome of this filing caused the drop in NVAX.

Despite, the negative news, Novavax CEO Stanley Erck said on Monday that his company was at the “tipping point” with regards to the vaccine and that he was confident that their vaccine would be “very effective” against the new strain of COVID-19, Omnicron. This could signal a turn in events for NVAX, if it is able to obtain FDA approval following which a bullish run could be observed in which NVAX tests resistance at 230USD, which would see the stock rise 45.8% in value. Should NVAX fail to obtain FDA approval, a bullish run could be seen in which NVAX retests and possibly breaks support.

Technical Analysis

With NVAX gapping down yesterday (27 December), the current price of 157.80USD may be a good entry point. Gaps are usually closed by markets and this suggests that the value of NVAX may very well increase considerably today. The market for vaccine stocks too was not as badly affected, with the NASDAQ Biotechnology Index falling just 1.45% yesterday. This suggests that should NVAX perform relative to other stocks in it’s sector, it is a good buy right now. The relative strength index (RSI) has also fallen slightly and this indicated that right now may be a good entry point. Most technical suggest that NVAX is a good buy right now, but for NVAX to continue rising it will have to quell investor’s worries through obtaining FDA approval.

References

Kaplan, Talia. 2021. “Novavax at ‘Tipping Point’ with COVID Vaccine: CEO.” FOXBusiness. December 27, 2021. https://www.foxbusiness.com/healthcare/novavax-at-tipping-point-with-covid-vaccine-ceo.

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