The AstraZeneca share price looks set to continue higher. Positive news flow over the weekend may provide a welcome booster shot for the drugmaker.
The U.K listed drug giant’s Covid-19 vaccine has received final approval for emergency use in Japan. The company will work with domestic pharmaceutical firms to deliver the country 120 million doses.
It has also just been announced that a U.K study has found its vaccine highly effective against the Indian Covid variant. News that Minister for Health Matt Hancock described as “groundbreaking.”
The AstraZeneca share price should react positively to the study’s success and is likely to trade higher next week.
Looking at a long-term chart, we can see that AZN has been in a strong uptrend for the last 4 years. However, In yesterday’s trading session, the shares nosedived 20% to 6,500p before making a strong recovery.
The sharp sell-off took the share price to bang on the trend line. This supportive trend provided the catalyst for an incredible turnaround. The AstraZeneca share price finished the day +0.05% higher, at 8,135p.
This bounce took the stock back above the key 50, 100, and 200-day moving averages (7,447p, 7,408p, and 7,815p, respectively). This is a positive development and should signal that AZN can push even higher.
The 50-day average has also crossed above the 100-day. This is another sign that momentum is turning bullish.
Considering the good news, I see the potential for the AstraZeneca share price to trade 8% higher to 8,800p. It will meet with resistance at this level, offered by a series of highs between August and November 2020.
Nonetheless, if the share price closes below the 50-day average at 7,815p, this would negate the bullish outlook.
Follow Elliott on Twitter.
