VXRT Stock News: Vaxart Inc price is hugely volatile, technical levels to trade around

Vaxart is a highly speculative biotech stock favoured by retail traders on Reddit and other social media sights. Biotech stocks in trial periods are always highly speculative and have huge spikes in volatility. Vaxart is no different with huge swings after various announcements.

VXRT stock forecast

Vaxart jumped in January during the peak GameStop (GME) frenzy as retail traders organised and looked for highly volatile, high returning stocks. The biotech sector meets these criteria and Vaxart meets the zeitgeist as it is developing a COVID-19 vaccine, among other potential candidates. Vaxart is developing an oral vaccine as opposed to the more traditional injectible approach.

Retail traders jumped in and created a frenzy of anticipation. This pushed VXRT shares from $7 to $24.90 in the space of seven trading sessions.

What happened next is common in the biotech sector, Phase I trials results disappointed with the oral coronavirus tablet appearing not to produce enough of an immune response. VXRT shares dropped as quickly back to $7.

The stock languished until another frenzy of speculation was unleashed on social media in late April. VXRT shares jumped from $6.20 to $11 in a few days of trading. VXRT shares jumped 37% on April 27 alone as retail-trading sites abounded with talk of VXRT potential and the company presenting at an upcoming conference. Hardly a solid base for investing but the new retail traders care more about speculation than boring old Buffet-style investing. 

Once again the VXRT share price came back to some form of reality as the earnings release on May 3 saw the shares drop over 20%. Earnings per share came in at -$0.14 instead of the forecast -$0.10.

Whether VXRT gets a home run with one of its potential candidates is unclear. But the modern retail trader looks to jump on the latest "to the moon" "ten-bagger" rather than focus on growing an investible portfolio. There is nothing wrong with this so long as it is money the majority can afford to lose because they will. This is what we preach at FXStreet, manage your risk or know that you are essentially playing craps and the house nearly always wins. The longer you manage your risk the longer you can stay in the came and reap the benefits when that "to the moon" does come along. 

So focus on some key levels which may help traders to at least manage risk accordingly. The main support to keep an eye on currently is the 9-day moving average at $8.07. A break will likely see a return to the lower range of $5-$6. Interim support at the 100-day moving average comes in at $6.95. 

Resistance is not worth talking about because if VXRT scores a hit with a vaccine candidate the shares will blast through all levels. That is the type of stock we are dealing with here. It can work, just look at Moderna (MRNA) but that is likely the exception. For every home run, there will be a lot of strikes that could bankrupt you. Manage risk or play with money you can afford to lose. Buying options will also help to manage risk.

At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

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