A massive amount of technical damage has been done to top leading stock charts lately, eliminating most low-risk buying opportunities. But today, we’re telling you about three hot biotech stocks breaking out to new highs–while also fighting against COVID-19.
Today, we are excited to show you the technical trade setups of three strong stocks currently ignoring the market and breaking out sharply higher–even as the major indices are falling!
All three stocks also happen to be the best players in the current, real-life battle against coronavirus/COVID-19.
Continue reading to discover how to profit from investing or trading these bullish coronavirus-fighting stocks–and feel good about the cause while doing so.
Gilead Sciences ($GILD)
Promising COVID-19 Treatment
Three-day performance:
NASDAQ 100: -9.6% loss
$GILD: +12.3% gain
Outperforming the NASDAQ 100 by more than 20% over the past three days, Gilead ($GILD) is an American biotech company with 22 billion per year in sales.
Their experimental drug named remdesivir showed promising results in the recovery of 14 Americans hospitalized in Japan for the treatment of COVID-19. Remdesivir also started Phase III trials three weeks ago and may currently be our best hope against fighting coronavirus.
The Technical Trade Setup
Initial stock reaction to this news was volatile and non-committal, but sentiment has sharply improved in recent days.
Now, a bullish monthly chart has positioned $GILD for a convincing breakout to new 52-week highs.
On the monthly chart below, notice how $GILD has sharply broken out above a long-term downtrend line that was in place since the highs of 2015:
On the chart above, notice that volume has also surged to roughly double the average daily levels, hinting at stealth institutional accumulation by the “smart money.”
Zooming in to the shorter-term hourly $GILD chart (below), notice the bullish double bottom pattern, which looks like a “W.”
With the double bottom pattern, the second low should “undercut” the first low, followed by a strong price reversal higher.
That’s exactly how it has played out on the hourly chart of $GILD lately:
As annotated on the chart, $GILD could be bought on a breakout above the $80 area OR on a pullback to the 20-EMA on the hourly chart (beige line).
When a strong stock breaks out, the first pullback to touch the 20-EMA often presents a low-risk buy entry point if the initial breakout entry was missed.
FujiFilm Holding ($FUJIY)
Japanese Coronavirus Treatment Gets Chinese Approval
Three-day performance:
NASDAQ 100: -9.6% loss
$FUJIY: +37% gain
Gilead may have the best possible COVID-19 treatment in America, but it’s a different story on the other side of the world.
Toyama Chemical, a subsidiary of Japanese conglomerate FujiFilm ($FUJIY), has been having consistent success with fighting coronavirus with a drug named favipiravir.
According to public broadcaster NHK, Covid-19 patients who were given the medicine in China showed negative test results about four days after becoming positive (compared with a median of 11 days for those who were not treated with favipiravir).
Now that China has given its seal of approval on the encouraging coronavirus drug, it’s quite possible that other regions around the world may start taking notice and be looking to buy as well.
The Technical Trade Setup
As a Japanese company, FujiFilm Holdings is traded as an ADR in the US stock market (ticker $FUJIY).
On the long-term monthly chart below, notice that $FUJIY has formed an extremely bullish reversal candlestick after breaking out to a fresh all-time high:
Drilling down to the hourly chart, we can see that $FUJIY may be a bit too extended for a low-risk entry at its current level.
However, we once again could look for a buy entry on a pullback to the 20-MA.
If the stock remains strong in the near-term and does not pull back, then look for a period of consolidation to allow the rising 20-MA to catch up after a correction by time:
Notice the huge relative surge of volume that has come into $FUJIY over the past week. Volume spikes like this are the fuel that can keep propelling the stock higher. Keep an eye on its volume to help predict just how high this coronavirus fighter may rally.
With FujiFilm Holdings trading at all-time highs, there is no technical resistance overhead. Therefore, pullbacks to areas of support in $FUJIY should remain buyable.
Moderna ($MRNA)
First Coronavirus Vaccine now in Testing
Three-day performance:
NASDAQ 100: -9.6% loss
$MRNA: +47.7% gain
Unlike $GILD and $FUJIY that are rocketing higher due to their effective COVID-19 treatments, Moderna ($MRNA) stock is suddenly looking bullish on the heels of its new coronavirus vaccine phase 1 clinical trial.
Human testing of the experimental mRNA COVID-19 vaccine began on March 16. In the clinical trial, 45 healthy adults are each scheduled to receive two vaccine doses, spaced 28 days apart.
The Technical Trade Setup
The weekly chart of $MRNA below shows the huge pick up in volume, as the stock moved off the 10 and 40-week moving averages a few weeks ago.
The past few weeks were volatile, but the price action has tightened up and become much more bullish over the past few days.
Aided by high volatility, $MRNA has zoomed a whopping +47.7% higher while the NASDAQ tumbled nearly -10%.
$MRNA convincingly broke out above resistance near the $30 level this week, on much greater than average volume. Check it out:
On the shorter-term hourly chart, we see tightening price action that could soon lead to an explosive breakout to new highs:
As with the $GILD buy setup, $MRNA can be bought on a breakout above resistance (above $33) OR a pullback to near the 20-MA on the hourly chart.
Speculative, but Already Bullish!
These three coronavirus stocks may not meet the strict criteria for our typical Wagner Daily swing trading setups, but each stock clearly has a bullish chart pattern that is poised for further upside–despite incredibly persistent weakness in the market.
Although these stocks could be considered speculative, it’s important to realize they also have solid technical patterns supporting them.
In other words, we are not bottom fishing in a weak market and just hoping for lucky news.
Nevertheless, it may be wise to reduce your share size while trading these stocks that are more speculative in nature than our usual swing trade setups.
Model Portfolio Update: Sideline Satisfaction
Stocks have plunged much lower since our most recent blog post, but it has not hurt our newsletter subscribers one bit.
That’s because the Wagner Daily’s model portfolio remains 100% in cash, as it has been since late February.
Being in cash may be “boring,” but it’s fantastic to be protecting previous gains while the main stock market indexes have been getting crushed.
Lacking any bullish follow-through days that would have given us a new “buy” signal, our market timing system continues to keep subscribers safely on the sidelines.
As always, Wagner Daily subscribers will be immediately notified of trade details when we jump back into the market again.
What is your favorite coronavirus stock pick? Drop us a comment below.
