Ozempic Maker Novo Nordisk Stock Stuck In Buy Zone; Is It A Buy Now?

Among top medical stocks to watch on the IBD Sector Leaders, Ozempic maker Novo Nordisk (NVO) continues to trade within a buy zone and to exhibit tight price action.

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How Novo Nordisk, Wegovy And Ozempic Are Changing The Weight-Loss Game For Patients And Investors

The Denmark-based drugmaker is a leader in the weight-loss drugs race, alongside Eli Lilly (LLY). Their primary weight-loss drugs are Wegovy and Zepbound, respectively. Both are taken through weekly injections. Ozempic is for diabetes and weight loss.

The stock has been chugging sideways since June 4, when it broke out from a 137.22 cup-with-handle buy point. The stock is still within the 5% buy zone which tops out at 144.08. Despite being as much as 10.6% extended at one point from its 50-day line, the sideways action has given moving averages time to catch up. Shares are now also staging a potential bounce from the 10-week moving average. A four-weeks-tight pattern also formed.

One important thing to note about the most recent base is that it was a late-stage formation. It’s the fourth base since the stock made its initial breakout in late 2022. The later the base, the higher the likelihood of it failing.

Another tricky thing about this stock is its Accumulation/Distribution Rating of D, showing that institutional investors like ETFs and mutual funds are selling more than buying.

Novo Nordisk Stock Pops After Study

On Friday, shares of Novo Nordisk stock rose following a study from the University of Oxford that showed its semaglutide diabetes and weight-loss drug (sold under the brand names Ozempic and Rybelsus) could lower the risk of developing dementia.

Patients who received the drug had a 48% lower risk of developing dementia compared to the groups that received the other diabetes medicines. This is the “first robust” evidence that the GLP-1 drug class could have a benefit on neurological and psychiatric conditions, researchers said.

Additionally, the study found that patients who received the drug had a lower risk of developing encephalitis, a form of swelling in the brain. The weight-loss drug also cut down on patients’ substance abuse problems.

In early May, Novo Nordisk stock pulled back after sales of Wegovy missed first-quarter expectations. Wegovy made $1.34 billion in sales, nearly double from a year ago. But this fell short of analysts expectations for sales of $1.49 billion.

Across all products, sales rose nearly 19% to $9.36 billion, beating analysts’ projection for $9.13 billion. On an adjusted basis, earnings jumped 25% to 81 cents per share.

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