With major pharmaceutical companies involved in the race to develop the COVID-19 vaccine, Sanofi SA (EPA: SAN) had recently joined forces with another pharma-giant, GlaxoSmithKlein (LON: GSK), to develop that potential cure. Although Sanofi is having a late start in the trials, the joint effort between the two above-mentioned companies could bring good results. According to one senior executive at Sanofi, not only that the potential vaccine could help fight the coronavirus, it might also come at a price under 10 euros per shot, which may put the possible drug under the good spotlight. Governments across the globe being the main buyers of the potential vaccine would welcome such a price, however, Sanofi still has a long way to go, as human trials started only in the beginning of this month.
In the meantime, Sanofi is achieving good results in developing drugs for other illnesses. Recently, the French pharmaceutical giant was granted a “Breakthrough Therapy” designation by the FDA, which was for the development of the drug called Dupixent, which is marketed together with Regeneron (NASDAQ: REGN), a US pharmaceutical company. That drug is a potential treatment for eosinophilic esophagitis (EoE), a chronic and progressive type 2 inflammatory disease that damages the esophagus and prevents it from working properly. Although tests and trials of that drug are to be continued, the news is still positive.
From the technical side, we can see that the latest news is having a positive effect on SAN. The stock is pushing higher and is currently testing a key resistance between the 88.38 and 88.64 levels, marked by the highs of September 10th and August 24th respectively. If the price eventually gets pushed above that area, that may interest more new buyers to join in. We will take a somewhat bullish approach, at least for now.
A strong push above the 88.64 barrier would confirm a forthcoming higher high, potentially clearing the path to the 89.80 zone, marked by the inside swing high of July 31st. Initially, SAN might stall there for a bit, but if there is still enough buying interest, the stock could easily rise to the 90.38 obstalce, or even the 91.00 level, marked near the highest point of August.
Both, the RSI and the MACD, are currently pointing higher on our 4-hour chart. In addition to that, the RSI remains above 50 and the MACD is above zero and its trigger line, which indicates that the upside speed of the price is still on the rise. All this supports the upside idea, at least for now.
Alternatively, if the stock somehow manages to drop below the 86.00 hurdle, marked by the low of September 11th, that may temporarily kill the buying interest, potentially increasing the chances for a further decline. SAN might then drift to the 85.00 hurdle, which if fails to provide support and breaks could open the way to the 83.89 level. That level is marked by the low of September 7th.
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