Is it Time to Cash Out Novavax Stock?

Vaccine developer Novavax NASDAQ: NVAX stock has collapsed (-61%) in 2022. The Company’s protein-based COVID-19 vaccine Nuvaxovid has launched in Europe and awaits CDC approval for launch the U.S. The U.S. FDA approval was granted on July 13^th making it the fourth COVID-19 vaccine approved in the U.S., but still needs the CDC approval to begin marketing. The Company had its first profitable quarter in its history in fiscal Q1 2022. The market adage goes, “Buy the rumor and Sell the news” applies here. The COVID-19 pandemic skyrocketed Novavax stock from a low of $6.26 in February 2020 to a nosebleed high of $331.68 in February 2021. While most of the U.S. COVID vaccinations have been supplied through Pfizer NYSE: PFE and Moderna NASDAQ: MRNA or Johnson and Johnson NYSE: JNJ, there is optimism for Nuvaxovid applications for people unable to tolerate mRNA technology.

Side Effects Hit Headlines

Recently the European Medicines Agency (EMA) indicated that severe allergic reactions will be added to the label as a side effect including paraesthesia and hypoaesthesia. The vaccines has a 90.4% efficacy rate according to its U.S. and Mexico trials. The Company may turn out to be a one-hit wonder as the FDA approval of Nuvaxovid marks it’s first in 35 years. Novavax has $20.11 cash-per-share and no long-term debt with a small 78 million share float with a 19% short interest. However, the race for a COVID-19 vaccines has already been won by the top three and there is very little indication of significant demand in the U.S. Investors expecting a return to its prior highs should reconsider utilizing opportunistic exit levels to cash out into strength.

Q1 Fiscal 2022 Earnings Release

On May 9, 2022, Novavax released its fiscal first-quarter 2022 results for the quarter ending March 2022. The Company reported an earnings-per-share (EPS) profit of $2.56 versus $2.49 consensus analyst estimates, a $0.07 beat. The Company saw revenues grow 57.4% year-over-year (YoY) to $703.97 million falling short of analyst estimates for $845.2 million. The Company reaffirms fiscal full-year 2022 revenue guidance for $4 billion to $5 billion compared to $4.49 billion analyst estimates. Novavax CEO Stanley Erck commented, "Novavax has been successful in launching our protein-based COVID-19 vaccine worldwide and executing on our plans for ongoing label expansions for pediatrics and homologous and heterologous boosting. Reinforced by our first profitable quarter, with $704 million in revenue, we are continuing our robust commercial rollout. Importantly, as new variants have emerged, we have progressed our strategy to be ready to address the dynamic environment and continue development beyond COVID-19 with our COVID-19-Influenza Combination vaccine candidate." 

NVAX Opportunistic Exit Levels

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for NVAX stock. The weekly rifle chart bottomed at $37.37 and staged a rally as shares surged to a high of $76.77 ahead of the FDA approval news. Shares sold off and triggered a mini inverse pup breakdown on the rejection of the $73.91 Fibonacci (fib) level. The weekly uptrend has stalled with a 5-period moving average (MA) at $55.92 and 15-period MA at $52.92. The weekly 200-period MA resistance sits at the $84.60 fib. The weekly stochastic triggered a mini pup bounce through the 20-band but is stalling at the 40-band. The weekly market structure high (MSL) sell triggers on a breakdown under $47.68. The daily rifle chart is attempts to reverse and breakdown as the falling 5-period MA at $62.58 falls towards the 15-period MA at $60.47. The daily 50-period MA sits at $52.54. The daily stochastic has a mini inverse pup falling through the 80-band. The daily market structure low (MSL) buy triggered on the breakout through $39.50. The $20.11 price level is the cash per share floor. The daily lower Bollinger Bands (BBs) sit at $27.69. Investors can use opportunistic exit levels from the $60.37 level to the $84.60 level to trim or sell shares. The weekly MSH trigger at $47.68 can act as a trap door trigger for the stock price if it breaks. The $39.50 daily MSL trigger can be used as a stop-loss level. Seasoned and nimble traders can look for a bounce off the $20.10 cash per share floor level.