AstraZeneca: here’s why our analyst is taking a long position

Since its recent highs, the pharma behemoth has failed to leap further. Our chartist looks for a catalyst.

FTSE Friday & AstraZeneca (FTSE:UKX & LSE:AZN) 

This is being written under duress, as the author is rapidly developing an extreme dislike for vaccines. 

Earlier today, the annual flu jab was administered, virtually in the GP's car park. The practice decided their ‘Flu Clinic’ risked being a dangerous nuisance with each treatment room needing cleaning down after the patient was seen. 

Instead, patients were seen behind dividers, not allowed to sit down, and the customary cuppa while awaiting any side effects making themselves known was a distant memory.

To be fair, the process was streamlined, and sitting around with a coffee whilst feeling like a fraud wasn't missed.

The dislike process comes from a stinking headache making itself known, along with a strong probability of being unable to sleep as the night progresses. 

Unfortunately, these symptoms occurred last year and there's no reason to suspect this year shall be any different. 

Difficulty with vaccines obviously reminded us that a hard look at AstraZeneca (LSE:AZN) was merited, especially given the conflicting and confusing reports relating to their Covid-19 treatment, developed with Oxford University. 

News of their jag tended to follow the messily beaten path trodden daily by UK politicians and a UK media always keen to find the worst aspect of events.

On day one the Oxford/AZN vaccine was groundbreaking, cheaper, easier to distribute. 

By day three, the trial results were noticeably less efficient than those mentions for Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) but we could be reassured this was due to a cock-up in giving different dose strengths during the trial. 

All things considered, this version of reality appeared to follow the UK playbook: promise the world on day one, then grudgingly give excuses thereafter. 

Perhaps, as all the results are preliminary, the company is in the same position as Pfizer and Moderna, all awaiting the time they can publish full results for proper scrutiny by bodies with more relevant experience than journalists.

Unfortunately for AstraZeneca's share price, there are implications from the current pause in proceedings.

It closed Thursday at 7,748p and now, the threat exists of weakness below 7,710p triggering reversal to an initial 7,232p with secondary, if broken, calculating at a bottom, hopefully, of 6,269p. 

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Some slight hope is generated due to movements during November as perhaps it shall bounce at 6,735p. Our normal logic suggests AZN shall deserve a long position, should 6,269p ever make an appearance. 

Alternately, should any miracle news drive it above 8,900p, go long and wait!

Source: Trends and Targets . Past performance is not a guide to future performance

FTSE for Friday

The US Thanksgiving thing sneaks up on us every year. It is a sensible market holiday which is easily overlooked. 

There's something almost essential about a break in proceedings between August and Christmas, but the FTSE 100 eschews the opportunity. 

On Wall Street, the market was closed for Thanksgiving, and today it closes early at 1pm Eastern Time. 

This US holiday generally spells a period of boredom for the FTSE, a session where despite any excitement, the market will doubtless close the day at the same level it opened. 

It can be assumed we're not bursting with optimism. Perhaps this year shall be different, thanks to Brexit, Trump/Biden & Covid-19.

Allegedly, market strength next exceeding 6,401 points should bring FTSE growth towards 6,500 next with secondary, if exceeded, up at 6,563 points. 

While there is certainly some inherent strength in the FTSE, we're not inclined to hold our breath for this scenario.

Instead, it appears more likely weakness below 6,350 shall prove capable of a visit to 6,304 points. 

Should such a level break, we can work out a secondary at 6,267 points.

Thanks to the US holiday and experience in prior years, our thoughts lean towards only initial targets being at risk for Friday, regardless of whether it's an up or down trigger.

Have a good weekend.

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.