Why Novo Nordisk’s stock recovery is a positive buy | Don’t ignore this chart!

Novo Nordisk (NVO) reported its first quarter results on May 2nd. Despite the positive report, NVO shares fell after sales of its weight-loss drug Wegovy were weaker than expected.

The selling may have been an initial and short-term reaction as NVO pivoted and opened a gap on Monday. Perhaps investors realized the stock was a bargain given that overall sales were strong, as were sales of diabetes drug Ozempic.

The stock was filtered from a StockCharts Technical Rank (SCTR) cross-scan that looks for stocks above the 76, 79, and 80 levels. The logic behind scanning is to find stocks that are starting to show strength and could potentially be good candidates to add to your portfolio.

Novo Nordisk’s technology outlook

Follow our live charts.

Let’s analyze the Novo Nordisk stock chart.

NVO’s five-year weekly chart below shows that the stock has been trending upward, especially since October 2022.

Chart 1. Weekly chart of NOVO NORDISK. The stock price was on the rise and is now on the decline. Can it rise and reach an all-time high?Chart source: StockCharts.com. For educational purposes.

For the most part, NVO has traded above its 20-week simple moving average (SMA). Stocks fell while the overall market fell. What’s interesting about NVO’s fullback is that it first looks like a flag pattern and then moves to the side.

Follow our live charts.

The daily chart below shows a more detailed picture. The upward trend stopped and then recovered. The stock has a 50-day SMA and volume is slightly high.

Chart 2. NOVO NORDISK daily chart. If the stock breaks above the 50-day moving average with a strong follow-through, the price could reach all-time highs and move upward.Chart source: StockCharts.com. For educational purposes.

that much relative strength index The RSI in the bottom panel is slightly above 50, indicating that if the stock moves higher, it has room to move before reaching overbought territory. The SCTR line in the top panel is above the 70 line, which is another positive factor for the stock.

If NVO continues to rise along with rising RSI and SCTR, there is a good chance the stock will hit an all-time high. If the upward price movement has a strong follow-up, the stock could hit new all-time highs.

In every stock, you have to look at the other side of the coin. What happens if the NVO fails to maintain 50-day SMA support? At this point, it could fall back to the 100-day SMA, which is in line with previous support levels. If SCTR falls below 50 and RSI falls below 30, the likelihood of an uptrend is greatly reduced.

takeout

When you find a stock you like, consider adding it to one of your ChartLists. Although not all charts may move in the direction you expect, NVO’s weekly and daily charts are worth paying attention to. Novo Nordisk’s stock price is likely to rise further, and if so, your portfolio could receive a significant boost.

SCTR crossing scan

(Country is USA) and (sma(20,volume) > 100000) and ((SCTR.us.etf x 76) or (SCTR.large x 76) or (SCTR.us.etf x 78) or (SCTR. large x 78) or (SCTR.us.etf x 80) or (SCTR.large x 80))

Credit goes to Greg Schnell, CMT, MFTA.

disclaimer: This blog is for educational purposes only and should not be construed as financial advice. You should not use any of our ideas and strategies without first evaluating your personal and financial situation or consulting a financial professional.