Novo Nordisk: A Great Bet Amid a Global Healthcare Transformation?

12/03/2024

2 minutes read

2024.12.03 04:24

Novo Nordisk (NYSE:), the company behind Ozempic and Wegovy, is now Europe’s largest company as global demand for its drugs have soared. 

However, the Danish pharmaceutical began because of more personal reasons.

In the early 1920s, Nobel laureate August Krogh and his wife Marie, a doctor living with diabetes met at the Danish Medical School, where August was Marie’s professor.

They fell in love. At the time, Canadian scientists were working on a miracle cure for diabetes: insulin.

In love and apparently brilliant, they traveled to Toronto and came home to Denmark with the rights to manufacture insulin in Scandinavia. 

Hugely successful, the couple have donated billions to assorted charities through the years.

Now, with the diet drugs, there is about to be another societal shift.

According to an article in the NY Post, the diet drugs have “changed the foods we eat, the ways we celebrate, and exercise, and travel, and dress, and talk about health and beauty.”

It behooves you to investigate which companies are related to the life-changing characteristics the article mentions.

I have been on this theme since 2023, and now have it as one of my major investment themes for 2025.

Looking at the chart of Novo-Nordisk…

I put 2 timeframes to look at, the weekly and the monthly so we can see more longer-term. NVO-Weekly and Monthly Chart

On the weekly chart, the support at $100, where the year began, is exactly where the stock found support in November 2024.

NVO underperforms the benchmark, which means this could be the early stages of another potential rally.

Real Motion indicates momentum has yet to revert to the mean. That would be a good sign that the sell-off or at least the risk to the $100 level is a good one.

On the monthly chart, the blue line is the 23-monthly moving average.

The 23-month MA comes in at around $106.50.

The stock has found some buyers as we begin December. Plus, holding the 23-month MA means that the company’s stock is still in a positive 2-year business cycle expansion.

If you look at November, the month began at around $113.

Look back at the weekly chart, and you can see that the stock began to break down in October under $113.

Therefore, the most conservative price confirmation is to see the price return above $113 and hold as we end 2024 and head into 2025.

Plus, do not forget about the domino effect of the new “thin” consumer and what they will spend money on with their new lease on life.