By Michael Nauss, CMT, CAIA, CDMS
1/ Indexes
2/ Diamonds in the Rough
3/ The Ozempic Effect
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1/ Indexes
Yesterday, we talked about weakness under the hood in the equity market. Today, we have stocks following through on that weakness. As always, on weak days, I think it’s useful for investors/traders to search for stocks showing strength and bucking the trend.
2/ Diamonds in the Rough
Most of the stocks that have been holding up well were all low-float names, but one did grab my attention as a possible idea, and that was Weight Watchers (WW), which received an upgrade after starting to incorporate Ozempic in its practice. The chart below shows a nice little breakout in this weak market.
3/ The Ozempic Effect
After noticing the Ozempic-related move in Weight Watchers (WW) I started to look around for other names that might benefit if the move continues.
Below, we have the creator of the drug Novo Nordisk (NVO). It’s holding well after its recent earnings gap, building a tight base at highs and could be one way to play the continuation.
Next, we compare Novo Nordisk (NVO) to one of the industries the weight loss drugs could hurt. The below chart shows that as Novo Nordisk (NVO) rallies, McDonalds (MCD) has been selling off.
For people looking to play both sides of the market, these two may display a correlation for a while yet. As for me, these names will be on my watchlist for a while.
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Originally posted 7th September 2023
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