Novo Nordisk had a tough trading day recently, dropping more than 2% from the day before. The company’s stock has struggled this year and is now more than 50% lower than its high points earlier in 2024. Novo Nordisk is a prominent player in the pharmaceutical industry, specializing in treatments for metabolic and chronic diseases. This sharp decline comes even though there was an increased demand for its products, which initially raised market interest. The recent drop in stock price might be a good chance to buy, according to technical analysis. The first key level to keep an eye on is around $43, the lowest price this year. This could act as support and lead to a price rebound. Another potential buying level is about $40.78, which could target the technical gap. These zones indicate a higher chance of a rebound happening. While these technical points are promising for buying, it’s crucial to manage risks since market outcomes are uncertain. Novo Nordisk’s stock has fallen 50% from its highs earlier in 2024. This has caused implied volatility to rise over 55%, a level not seen in years. As a result, buying options has become expensive, so we’re considering strategies that involve selling this high premium. The stock’s steady decline offers clear chances for option sellers who think the worst may already be accounted for. We see the $43 support area as a great place to sell cash-secured puts for options that expire in January or February 2026. This strategy allows us to earn income now while setting a purchase price below the current market, which is appealing given recent competitive pressures. Industry reports from Q3 2025 showed that new competition from Eli Lilly’s oral GLP-1 drug took 15% of the new-start market. However, our models indicate that this challenge is stabilizing. For a trade with more defined risk, the gap fill around $40.78 is the right spot to create bull put spreads. By selling a put option with a $41 strike and buying a lower one at about $38 for protection, we can limit potential losses if the stock keeps falling. This cautious approach makes sense given the stock’s rapid rise in 2023 and early 2024, which left few strong support levels behind. On the other hand, if the stock dips below the $43 pivot low with strong volume, we need to acknowledge the ongoing bearish trend. In such a case, we would consider buying put options or starting bear call spreads, anticipating a further drop toward the $40 psychological level. This perspective is reinforced by ongoing news in 2025 about possible government price negotiations in the U.S., which poses a significant concern for the entire sector.

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