Novavax, Inc. (NASDAQ:NVAX) is set to print its first-quarter financial results after the market close on Thursday. The stock was trading more than 6% lower, at one point, heading into the event.
When the Maryland-based biotechnology company printed its fourth-quarter results on Feb. 28, the stock closed the next trading day flat, which burned the premiums on any close-dated options traders had purchased.
For the fourth quarter, Novavax reported a loss of $11.18 cents per share on revenues of $222.2 million, which badly missed the consensus estimate of a loss of $1.80 per share and revenues of $331.79 million.
For the first quarter, analysts estimate Novavax will report EPS of $2.69 on revenues of $845.2 million.
Heading into the event, B. Riley Securities maintained its Buy rating on Novavax but lowered its price target to $203. The target price suggests an increase of 282% from the current share price.
Novavax has plummeted about 84% from its Feb. 9, 2021, all-time high of $331.68 and has declined about 56% this year.
From a technical standpoint, Novavax looks set to head lower following its earnings print but it should be noted holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat. Options traders particularly, those who are holding close dated calls or puts, take on the extra risk because the institutions writing the options increase premiums to account for implied volatility.
The implied move for options of Novavax expiring this week is 15.15%.
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The Novavax Chart: Novavax has been trading in a fairly consistent downtrend since March 22, making a series of lower highs and lower lows on the daily chart. Novavax’s most recent lower high was printed on May 5 at $63.23 and the most recent confirmed lower low was formed at the $42.13 mark on April 28.
- If Novavax closes the trading day below the $54.50 level, it will have lost support at the eight-day exponential moving average, which will negate the possible bull flag the stock may have settled into. The other possible pattern Novavax has set up on its chart is a quadruple top pattern and if the pattern becomes dominant, the stock will continue to trade lower.
- The move lower on Monday was on lighter-than-average volume, which indicates there is currently a lack of interest in the stock. The volume is likely to pick up following the earnings print, and traders and investors can watch for increasing volume in the after-hours on Monday and on Tuesday morning to gauge the direction.
- Novavax has resistance above at $54.50 and $76.59. There is support below at $40.98 and then there is a lack of support until $26.10 due to a gap that exists between that price and $36.08.
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Photo: Courtesy Novavax