Moderna Stock Shows Surprising Strength; Key Rating Upgraded

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Moderna (MRNA) stock surged as much as 8% Wednesday before settling to a 5.8% gain after it reported promising results for a melanoma cancer treatment the day before. The Wednesday price jump followed a nearly 20% surge in its stock price Tuesday. Also on Wednesday, the Relative Strength (RS) Rating for Moderna stock shot up to 96, from 87 a day earlier.

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The 96 RS Rating means Moderna stock has outperformed 96% of all stocks, regardless of industry, over the past 52 weeks. Market research shows that the best stocks typically have an 80 or better RS Rating at the beginning of a new climb.


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Moderna Stock Tied To Messenger RNA Technology

Patients who received Moderna’s cancer vaccine, which it partnered with Merck‘s (MRK) Keytruda cancer treatment, were 44% less likely to relapse or die than with Keytruda alone. Keytruda is the standard treatment for melanoma. Moderna stock is now considered extended and out of buy range after clearing a 188.75 buy point in a first-stage cup with handle.

See if Moderna stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week moving average.

It’s been a wild year for Moderna. In the final quarter of 2021 it reported more than 1,000% year-over-year sales and profit growth due to its Covid vaccine. From there it dwindled to “just” 200% growth the next quarter and then a year-over-year decline in earnings the next quarter, on a 9% rise in revenue. Sales and profits dwindled as Covid vaccinations waned. Last quarter, both sales and earnings were negative.

Will Diversification Succeed?

The question now is: Can Moderna continue to diversify from its Covid vaccine with its innovative messenger RNA, or mRNA, technology. It used it first to create the Covid vaccine and is now trying to use it to treat cancer. But it has tough competition in that market.

Meanwhile, Moderna stock earns the No. 71 rank among its peers in the Medical-Biomed/Biotech industry group. Catalyst Pharmaceuticals (CPRX), Genmab (GMAB) and Harmony Biosciences (HRMY) are among the top 5 highly rated stocks in the group.

When looking for the best stocks to buy and watch, keep a close on eye on the Relative Strength Rating. IBD’s unique rating tracks price movement with a 1 (worst) to 99 (best) score. The score shows how a stock’s price performance over the trailing 52 weeks stacks up against all the other stocks in our database.

Please follow James DeTar on Twitter @JimDeTar 

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