Josh P. has asked two great questions about Novo Nordisk, the Danish based manufacturer of the much talked about Wegovy drug for obesity and Ozempic for diabetes. He asks is it safe to invest in the US listing and why is such a huge stock not included in the S&P 500 (SPX), states Ian Murphy of MurphyTrading.com.
The stock’s primary listing is on the Copenhagen exchange in Denmark, with a secondary listing of American Depositary Receipts (ADRs) on the New York Stock Exchange (NVO). ADRs are not common stocks with ownership rights, but certificates which track the price of a foreign company's shares. This is why ADRs are not included in the S&P 500 index.
The weekly charts above are a year’s worth of trading on both exchanges (Copenhagen on top, US ADRs below) and the price patterns are almost identical, but NOVO.B trades in Danish Krone and NVO in US dollars. Considering the liquidity of the US listing, the main concern for a US based trader or investor (as Josh is) would be opening gaps on price. But for a long-term investment this is less of an issue. For actively managed investments, the exit would be on a close below the -1ATR line (Keltner Channels on these charts) as with other stocks.
Learn more about Ian Murphy at MurphyTrading.com.
