Novo Nordisk has long been a high-quality pharmaceutical company with a focus on diabetes, producing consistent financial results and investor returns. But its stock price really took off after the company launched its blockbuster weight-loss drug Wegovy in June, 2021. Given that obesity has taken the proportions of an epidemic in many Western countries, it is no wonder that sales at Novo Nordisk began to compound at a 25-30% clip since Wegovy came to market.
After reaching an all-time high of over DKK 1000 per share in mid-2024, however, the stock sold off by nearly 50% and eventually finished last year down 10.6%. Despite management’s guidance for another 16-24% constant currency sales growth in 2025, Novo Nordisk bulls are starting the new year on the back foot again. With the help of the chart below, we try to make Elliott Wave sense of it all and find out if this is a buying opportunity or part of a bigger selloff.
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The 4-hour chart of Novo Nordisk shows that the 50% crash the stock suffered in the second half of 2024 took the shape of a five-wave impulse. We’ve labeled the pattern 1-2-3-4-5 in wave (a), where the structures of waves 1 and 3 are also visible, while wave 5 is the extended one. Wave ‘v’ of 3 is an ending diagonal. According to the theory, a three-wave correction follows every impulse and usually erases the entire fifth wave.
Here, this would translate into a recovery towards the resistance of wave 4 near DKK 800 a share. Joining the bulls there would be a bad idea, however, because the 5-3 wave cycle would be complete and the bears should return in wave (c), whose targets lie below DKK 500. In other words, the market cap of Novo Nordisk could expand by a third from current levels, only to be cut in half again after that. If this count is correct, the bears are not done with the stock just yet.
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