NVAX coronavirus panic. Currently, several biotech shares rose significantly yesterday. The driving force is a fundamental fear of the coronavirus. NVAX is one of the potential candidates who can isolate and solve the problem. The fair value of NVAX stock is currently around USD 11.5. Technically, the stock price is in the right place. But what about panic? Is technology down there? ... Not sure. With braver target prices, the next upswing can be exploited. Let's start with the most basic target price rule. The target price is the sum of the closing value of the given trading time frame and the ATR of the two farthest moving averages measured at the closing values. Where can we be brave here? There to raise the timeframe to W1. In this timeframe, we generate a closing value ATR and this can give you a target price level. So if we calculate a target price using W1 ATR calculation, then the target price can be 33.6usd. A 231% increase from the current level. This analysis is highly speculative. But in panic it can easily work.
I'm looking more in to NVAX. The chart below shows some interesting things. Notable is the big gap down at the end of Feb 2019.
Pretty regularly I see charts like these where something happens and the gap is filled much later on. What could cause the gap to fill is excitement about Novavax in coming weeks. For others looking on, I make no predictions. This is all speculative.
Novavax is dirt cheap at the moment, so it seems useful to take a controlled affordable loss going long (at this time). If the market moves much further north, stop losses will become heftier for those coming in late. Not a good idea to chase this market north. It's about getting in at the right time. So - I think Meszaros has probably got in at the right time i.e. smaller losses with potential big gains - and no need to chase.
Disclaimer: Nothing said in this comment is advice or encouragement to trade securities. Trading is a high risk activity associated with heavy losses for about 75 - 90% of people. This means if anybody trades this and loses money, they need to sue themselves.
freddie1996
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@Captain_Walker, Where would you put a stop loss for an $8 entry?
meszaros
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@freddie1996, Although the question is not for me, I use a D1 ATR stop order. Because the target price is far enough away.
freddie1996
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@meszaros, Thanks for your reply. I was wondering why you don't include your stop loss prices on your analysis' you do?
meszaros
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@freddie1996, This is a very good question, thank you. :) Many people asked me. Because everyone has a different Money Management. Everyone else trades with a different trading account size. I consider these analyzes to be a private market opinion. Not for investment advice.
freddie1996
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@meszaros, Thanks for your reply. Regarding account size I have always heard the advice that account size should be an independent factor when it comes to decision making when trading, whether that is portfolio allocation / stop losses/ risk-reward ratio etc. The advice goes that one should trade in the same way they would if they were managing far more money than they currently have or else when it comes to that time when they do have lot's of money they would be unprepared. Although there is a strong argument that there is a smooth/gradual evolution which happens naturally in one's money management strategy as their account size increases. Could you elaborate further on this because I am starting out and was unsure whether to follow this advice?
Based on your reply I assume your on the side of changing your money management strategy dependent on your account size? Regardless of whether you advise this, I still don't understand your decision to not include your stop losses in your analysis', all your publishings follow the warning you wrote (below your profile picture) "The analyzes on this site are private opinions and not investment advice." So why not include stop losses? Providing a target price in effect is half the piece of the pie which you always do...just curious
@freddie1996, Meszaros has answered this wisely. In essence stoploss must be affordable and near bottom of the market. The affordable loss will be based on one's position size. Any stoploss has to be considered a write-off. That means one is prepared to throw away the money. Eh? YES - that's what a stoploss about - it's truly about loss.
Captain_Walker
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@freddie1996, Also this could be of some use but not a recommendation.
freddie1996
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What do you see happening to this stock if it is found that the coronovirus can't be treated by a vaccine, much like the Rhinovirus (common cold)?
Also, there has been a really strong pull back this morning since Friday last week. Is this a bad sign or do you expect more bullish move to the upside?
Pretty regularly I see charts like these where something happens and the gap is filled much later on. What could cause the gap to fill is excitement about Novavax in coming weeks. For others looking on, I make no predictions. This is all speculative.
Novavax is dirt cheap at the moment, so it seems useful to take a controlled affordable loss going long (at this time). If the market moves much further north, stop losses will become heftier for those coming in late. Not a good idea to chase this market north. It's about getting in at the right time. So - I think Meszaros has probably got in at the right time i.e. smaller losses with potential big gains - and no need to chase.
Disclaimer: Nothing said in this comment is advice or encouragement to trade securities. Trading is a high risk activity associated with heavy losses for about 75 - 90% of people. This means if anybody trades this and loses money, they need to sue themselves.