Time to go Long NVO?

NVO has had a tough year. It's down 53% ytd.
I accumulated 100 shares at $50 in August and stupidly held the bag despite the price hitting my target of 60.

The price is back down around $50, and looking like a good time to buy.

If you look down at the RSI the last 2 times it sunk to oversold, it triggered runs of 10-20pts.

Personally, I think the stories of increased competition are overblown. This is the largest company in Europe and still a leader. The share price needs help from some US gov't policy, but it's definitely in its accumulation zone again. Moreover, it looks like it could finally break the downward trendline started back in December.

Share prices dopped to $50 once again today on the news that it's bidding on Metsera. And on the news, I bought another 100 shares.

This trade is active.

Trade ist aktiv

I'm in at 50. So I now have a position of 200 shares at an average of 50.2
I think holding this level of 50 by the end of the week is bullish.
There's a chance I'll buy a couple protective puts for NVO earnings next week. But I'll cross that bridge next week.
We're active!

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I want to add a note.
I rarely use a stop loss. Since I'm trading 100 shares or more, I will instead buy a put option which works as a synthetic stop loss.
Right now, I'm not a fan of how the stock is moving. It dropped because they are planning a bid for Mestera. Now it's dropping again because there are rumours that their bid will fail. Confidence in the stock growth is a concern.
BUT, it's undersold at an RSI below 30. In hindsight I should have waited a couple days to see the RSI start pointing the other direction first.

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I sold 2x 58strike covered calls yesterday for 0.20 each - expiring today. It seems silly, but never say no to free money.
My position is down $320 now - $40 from the covered calls = -$280
I do not have any protective puts, and won't buy any until the day before earnings.

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Will update this on Tuesday (the day before earnings). Don't hate how today went. Some decent volume today indicating that it may be starting to turn. Earnings will be an x-factor, but I'll show you how I plan to deal with that on Tuesday.

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RSI is down to 25 and there's volume here. It feels like some people letting go before earnings, so the drop doesn't concern me, but I do wish I would have DCA'd into this last 100 shares.
I have no options play set up right now. But I will update tomorrow with what I decide to do.

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Looks like there's lots of positive action coming into the earnings tomorrow. My position is basically flat.
I was planning on buying a protective put, but the prices are so high, I think I'm just going to let it ride through earnings.
If it drops, I'll sell puts and average down.

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Hindsight is easy, but since I already had 100 shares, I should have waited until post earnings to add to my position.
Looking at the graph, we have a double bottom here and an RSI of 21 (way oversold). I would like to go back in time and buy my 100 shares here instead - or DCA'd into my position.
HOWEVER, I do think that this will start to bounce or flatten at the very least.
Looks like we're in this for the long run - I'll update with any new adjustments (options moves) to this position every Monday.

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A bit annoyed with myself that I didn't DCA into the position like I usually do.
Last price is $45.8.
Average is $50.2 (200 shares)
I'm -$880 in equity.
I made $40 in options premiums. So the position is -$840

I'm still bullish. I'm just annoyed at myself that my average is $50.2 instead of about $47.

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What a week. It feels like we cannot leave this downhill channel and it's going to take some news to break us out.

The double bottom does give some hope, though, and actually the positive move this week gave some hope.
Still, we need more momentum.

On Tuesday I sold a covered call for $.06 at a $57 strike. That's the only thing I did with this position this week.

So the update is:
Equity = 200 shares @ 50.2 (current price $48.10) = -$420
Options = $46
Total position = -$374 (+$466 on the week).

I'll probably write another call or two on Monday just as a way of sort of "earning interest" for holding the shares. I'm still bullish, it's just a matter of patience.

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Weekly update.
The only thing I did this week was sell 2 $57strike covered call for $0.22/share. They both expired today.
So the position is:
Equity = -$490
Options = +$90
Total = -$400

I still believe this is going up. I think we just need some news to help be a catalyst.
On Monday I'll sell more covered calls and at least keep earning there as it stays flat.

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If you look at the chart, this is playing out basically as planned. But it feels a bit boring because it's not a fast play.
I think this coming week will be the moment of truth. If we can break out of this falling wedge, we have the chance to bounce.
My biggest annoyance with this trade is that the options premiums are terrible. So I'm not even benefiting from selling calls anymore.

The position is much better from last week, but still red.
Equity = -$240
Options = +$90
Total = -$150

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Yawn...
I feel like this week is very important. We're flat and holding around $47 which feels a lot like a bottom. If it is a bottom and holds flat, then the upper edge of the trendline should break. Hopefully that triggers some motion.

If I'm being honest, I'm getting tired of holding this stock just because the premiums are so bad right now I can't even really sell covered calls to profit off the sideways movement. I think if we don't see upward movement soon, I might sell out and deploy my money elsewhere (at which point the stock will likely skyrocket haha).

The position is:
Equity = -$490
Options = +$90
Total = -$400

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If you look at the chart I built at the start of this, the action has followed almost exactly along with it.
The problem with swing trading is sometimes the swings are slow and you can get frustrated. That's what happened with me last week. I wasn't looking at the big picture and I started to think: "Ok, I want a way out of this trade, it's boring.

So, I sold a Dec19 $51 strike covered call for $22. As soon as I did, the price action jumped for NVO and we started making moves.
That said, if the $51 strike covers next week, I'll live with it and be happy to have a trimmed position. In fact, if it doesn't cover, I'll probably just sell another one slightly higher next week and keep doing that until one catches. The problem is that the premiums are just very weak right now.

Anyways, nice action on the stock this week and we're finally green!

The position is:
Equity = +$28
Options = +$102
Total = +$130

The good news:
1. We have now left both the major upper trendlines: the one dating back to Sept2024, and the less steep one that started Dec2024.
2. The double bottom pattern was validated
3. There's lots of bullish divergence on the daily chart.

Unless there's bad policy news, I think we'll start to work our way up from here.

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Yawnnnn. I'm really hoping there's some action soon.
Last Friday I sold another $51 strike covered call for $0.13
I want to trim my position, so I'll happily take a tiny profit along with the premium.

The position is now:
Equity = -$460
Options = +143

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Actually hilarious that the stock action is playing out exactly as my graph indicated. But still I got impatient.
My $51 covered call got taken, so I am down to 100 shares, and actually I feel good about that.
I made a meagre $80 in realized gain from the equity trade. But I'm still happy

The trade is starting to look a whole lot better now.

The current position is:
Equity = +220
Options = +143
Realized equity gains = +80
Total position = $443

brendanvanson

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brendanvanson

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