Investors Boost This Stock Price With Hopes for Blockbuster Weight Loss Drug
The emergence of a potential breakthrough weight loss treatment could drive a major healthcare company toward to new highs.
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Roche Holding AG ADR RHHBY posted early-stage data for its second obesity drug candidate that was acquired from a purchase of Carmot Therapeutics in late January 2024. I know of a number of people taking weight loss drugs from Eli Lilly LLY and Novo Nordisk NVO and that they like the idea of a pill instead of an injection.
Is this going to be a game changer? I don't know, so let's check the charts and indicators.
In this daily bar chart of RHHBY below, I can see that RHHBY was already in an uptrend before this news hit the newswires. Prices made a V bottom in early May and have not looked back.
RHHBY trades above the rising 50-day moving average line and above the bottoming 200-day line. The 50-day line is about to cross above the 200-day line for a bullish golden cross buy signal. The trading volume shows a big increase in activity in April as prices were about to bottom — smart money perhaps? The daily On-Balance-Volume (OBV) line turned upwards since April telling me that buyers of RHHBY turned more aggressive at that point in time. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly Japanese candlestick chart of RHHBY below, I can see that prices are breaking a longer-term downtrend as they trade above the now rising 40-week moving average line. The weekly OBV line has turned higher and the MACD oscillator is about to cross above the zero line for an outright buy signal.
In this daily Point and Figure chart of RHHBY below, I can see a potential upside price target in the $57 area.
In this weekly Point and Figure chart of RHHBY below, I decided to use a five-box reversal filter. Here the software is suggesting a price target in the $75 area. Lots of people need to lose weight.
Bottom line strategy: I am no pharmaceutical expert, so keep that in mind, but Roche may have bought themselves a "blockbuster." Keep in mind that drug approvals are a risky business, but the charts are pointed up at this point in time.
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