New yearly highs: vaccine hopes drive cheers from Pfizer bulls

November 12, 2020 11:00

New yearly highs: vaccine hopes drive cheers from Pfizer bulls

The trading week started with a bang: Pfizer and BioNTech announced that they found an experimental vaccine that is over 90% effective In preventing Covid-19. As a result, global stock markets and risk assets soared higher – but, surprisingly, stocks from pharmaceutical giant Pfizer have been "subdued" – what does this mean?

Vaccines hopes push #PFE to new yearly highs – further gains to come?

Ok, "subdued" performance is probably a little too negative, at second glance.

Pfizer closed more than 7.5% higher on Monday, but since the stock was up more than 13% at one point in the trading day, we still saw it giving back around 50% of its initial gains.

That comes as a surprise since Pfizer and BioNtech said that they can produce 1.3 billion doses by the end of 2021 with about 50 million in 2020.

The skepticism among market participants probably arose shortly after news on the Pfizer trial made rounds. Of the 43,358 participants in the study, 94 of them contracted Covid-19. Of those 94, some had received the vaccine and some had received a placebo.

Questions remain about whether moves in risk assets, and also Pfizer stock, are sustainable.

Certainly, Pfizer CEO Bourla said on Monday that demand for the vaccine will be "higher than anything we can produce". If high hopes materialize and push the stock up to $50 per share as some analysts predict, any disappointment or delay in further trials could result in sharp drops in the Pfizer stock price.

How can you trade #PFE in this environment?

The bullish open on Monday with a gap up at new yearly highs is the first clear bullish sign for the stock.

Technically, the break above the May and August highs around 39.00/50 USD is also clearly bullish and the re-test of this region on Monday in which it found support underlines that the stock may have found a potential long-trigger.

From here, a run up to 42.00 USD is an option with a break higher levelling the path up to the region of the 2019 yearly highs of around 44.00/50 USD.

A drop back into trading between 34.50 and 38.50/70 would clearly neutralize the picture, meaning that a potential stop for our long idea lies at around 38.50, leaving us with a risk-reward of around 1 to 4 if we re-test the 2019 yearly highs:

PFE CFD daily chart

Source: Admiral Markets MT5 with MT5SE Add-on #PFE CFD Daily chart (from April 22, 2019, to November 10, 2020). Accessed: November 10, 2020, at 13:30 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of #PFE increased by 3.63%, in 2016, it increased by 0.62%, in 2017, it increased by 11.51%, in 2018, it increased by 20.51%, in 2019, it dropped by 10.24%, meaning that in the past 4 years, the stock is up 26.03%.


Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level than with MetaTrader 4. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5!

Trade With MetaTrader 5


Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
  9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.
Avatar-Admirals
Admirals
An all-in-one solution for spending, investing, and managing your money

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.