On Monday, Moderna Inc. (NASDAQ:MRNA) shares edged higher after revealing plans to develop a vaccine for the Omicron variant.
The stock surged nearly 10% after it said a new covid vaccine targeting the Omicron variant could be ready by early 2022. Moderna had rocketed more than 21% on Friday amid fears of the potential impact of the new variant.
The stock is still down more than 31% from its all-time highs of $497.49, reached in August this year. As a result, the stock has swung to a net year-to-date gain of about 195%.
Should you bet on the rally?
From an investment perspective, Moderna shares trade at an attractive forward P/E ratio of 12.52, making the stock a compelling option for value investors.
In addition, analysts expect the company’s earnings per share to increase at an average annual rate of 16.80% per year over the next five years. Therefore, Moderna could also gain the attention of long-term growth investors.
Source – TradingView
Technically, Moderna shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has surged closer to the overbought conditions of the 14-day RSI.
However, with the stock still riding strong tailwinds from the Omicron vaccine development news, it could extend gains deep into overbought conditions.
Therefore, investors could target extended gains at about $362.30, or higher at $400.15, while $296.97 and $257.91 are crucial support zones.
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