Valneva jumps as Lyme disease vaccine developed with Pfizer undergoes EU review
VALN's stock price surged following the news that the Lyme disease vaccine, co-developed with Pfizer, has entered the European Union (EU) review process.
A strong positive catalyst has emerged with the entry into the EU review for the Lyme disease vaccine in collaboration with Pfizer, but the current RSI is at 83.9, indicating an overbought condition, and it is positioned near the resistance level of the 20-day high ($5.83), which may lead to significant short-term volatility. Therefore, rather than chasing the stock immediately, I will consider approaching on dips near the support level ($4.75).
Be mindful of the overbought condition with an RSI of 83.9 and the short-term volatility near the resistance level of $5.83, which is the 20-day high. When the price adjusts near the support level of $4.75, I will consider entering, aiming to take profits when it reaches the resistance level of $5.83. If the support level of $4.75 breaks, I will cut losses.
The RSI(14) is at 83.9, indicating an overbought condition, the moving averages are in a non-aligned state, the trading volume is 0.99 times the 20-day average, and the recent 7-day volatility has recorded +9.9%.
The clear positive news of entering the EU review for the Lyme disease vaccine co-developed with Pfizer has exerted strong upward pressure on the stock price. At the time of entry, the RSI was at 83.9, indicating an overbought condition, and we set a scenario anticipating volatility near the resistance level of the 20-day high ($5.83) while monitoring for a potential approach to the support level ($4.75). However, the actual market continued to experience strong buying momentum without any correction, resulting in an actual return of 26.2%, significantly exceeding the forecasted return of 4.5% (OVERHIT). It is regrettable that we could not fully trust the additional upward momentum during the rapid rise, which was overly focused on short-term overheating indicators.
For stocks accompanied by strong momentum (catalysts), even if the RSI has entered the overbought zone, it is necessary to consider the S-Class conversion rate of the theme and the impact of positive news to contemplate a flexible segmented approach or an increased target price. In the next trading session, when the warning signals from technical indicators clash with the actual supply and demand strength in the market, I will adjust the criteria to place a slightly higher emphasis on the weight of momentum.