NUVL shows signs of base-building

We received a request for a technical read on Nuvalent (NUVL).

NUVL has the potential to form a basing pattern dating back to September 2024. Similar to the late 2021 into mid 2023 basing process, NUVL could form a bullish cup and handle. The stock has eased from its late November peak at 112.88 (potential handle high), and holding the 90.97 to 77.44 range (38.2% to 61.8% retracements of the rally from the cup low to the handle high) would increase confidence that NUVL is building a bullish cup and handle. Rising 26- and 40-week moving averages near 88.89-83.52 reinforce this retracement zone as potential support for the developing handle.

If NUVL breaks out above 112.88-113.51 (November 2025 and September 2024 peaks), it would confirm the basing pattern with upside potential to 121.30 (61.8% extension of the 2022-2024 rally projected off the 2025 low) initially and then much higher to 161.95 (100% extension) and 170 (pattern count).

On a relative price basis, rising weekly moving averages confirm an improved trend for NUVL versus the S&P 500.

Chart 1: Nuvalent (NUVL) (top) and relative to the S&P 500 (bottom)

Volume leads price. Breakouts for the weekly on-balance volume (OBV) and volume advance decline (VAD) indicators suggest accumulation (aka buying) as NUVL traces out the potential base-building pattern highlighted above. These volume breakouts provide a bullish leading indicator for an upside breakout in NUVL's stock price. This setup resembles the constructive pattern for Moderna (MRNA) highlighted in this blog earlier today. Stay tuned...

Chart 2: Nuvalent (NUVL) (top), on-balance volume (center), and volume advance decline (bottom)