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April 19, 2005
Battle of the Blubber
Barron’s (click here) covers the HealthCare sector this week and singles out some of the diet stocks (Weight Watchers WTW, eDiets DIET and Nutrisystems NSI). The article sites media reports that assert the following:
- 37% of Americans over 60 will be obese by 2010
- 71 million people are on some kind of diet program
- The weight loss market will grow from $46.3 billion in 2004 to $61 billion in 2008.
Those are some amazing numbers and point to years of demand to battle the blubber.
The chart for WTW shows a decline back to broken resistance just above 40. A key tenant of technical analysis is that broken resistance turns into support. Also notice that the Feb-Apr decline looks like a falling wedge that retraced 50-62% of the Aug-Jan advance. The stock broke trendline resistance on Monday, but volume was not that impressive. Before becoming enamored with this stock, I would like to see higher upside volume and a break above the 31-Mar high at 43.
Posted by Arthur B. Hill at April 19, 2005 07:32 AM