Is Logic Overrated in Markets? Weight Loss Stocks, Greenland, and Keynes

When it comes to trading markets, is logic overrated?

I know, I know. I’m about to be inundated with Star Trek fans referencing Spock. But even a Vulcan would have to acknowledge Keynes’ perfectly logical quote about the illogical, irrational nature of the markets. 

That irrational nature gets us out of bed every morning. If markets traded in a rational fashion, stock prices would be stable, and finding an edge would prove difficult. 

Novo Nordisk Breaks Out

In a logical world, you wouldn’t expect a Denmark-based company that sells to the U.S. to close at a three-month high. Not at a time when Denmark and the U.S. are on the verge of an economic battle over Greenland.

Yet that’s exactly what happened to Danish pharmaceutical company Novo Nordisk  (NVO) . The company’s NYSE-traded ADRs jumped 9.12% on heavy volume (arrow) on Friday. 

Thanks to that move, Novo Nordisk shares have cleared their 200-day moving average (red), which capped the stock for all of 2025. After a lengthy decline, the stock’s 50-day moving average (blue) is turning higher.

My price target for Novo Nordisk is the June 2025 high of $81 (black dotted line).

Wegovy Reaction Pops Stock

Novo Nordisk manufactures the popular Wegovy weight-loss drug. Until recently, Wegovy was only available in injectable form, but now it can be purchased as a daily pill.

Friday’s rally was the market’s response to preliminary data showing strong adoption of the Wegovy pill. Novo Nordisk CEO Mike Dousdar claims the potential market for the pill is 85 million, more than five times greater than the market for injectable Wegovy. 

One potential problem for Novo Nordisk is that 71% of current users of Wegovy reside in the U.S. A prolonged economic battle over Greenland could render the company’s sales projections meaningless.

Eli Lilly Has an Alternative 

Competitor Eli Lilly  (LLY)  has its own daily weight loss pill, called orforglipron. That may sound like an interplanetary fungus, but it’s a daily weight-loss pill made by Indianapolis-based Lilly.

Despite this home-field advantage, Lilly’s chart shows a stock falling below its 50-day moving average (blue). Lilly also appears to have formed a bearish double top (arrows)

If you’re thinking logically, Lilly would be the obvious trade. But if that’s true, why does Novo Nordisk arguably have the more-bullish chart?

Perhaps markets are telling us that there isn’t going to be a drawn-out economic conflict between the U.S. and Denmark.

Instead, a more diplomatic solution will be found — perhaps one that keeps Greenland under Denmark’s control, but allows the U.S. to operate more freely there.

That logical solution dovetails with the alignment of the charts right now. Maybe the market isn’t irrational after all. 

At the time of publication, Ponsi was long NVO.