All Weight Loss Programs Are Not Alike!

Sounds like a commercial right? January is the time to go the gym, sign up for a membership you will never use and then go on a diet. Two major competitors do all that they can to get your weight loss business, Weight Watchers, $WTW, and NutriSystems, $NTRI, and many will think it does not matter which one you use. That may be true but it does matter which stock you might pick to trade. Take a look.

Weight Watchers, $WTW

Weight Watchers, $WTW, got beaten up badly after it reported earnings in May 2012 finally bottoming in August. Since then it has been trending higher, making a series of higher lows along the rising trend line, and nearly retraced 50% of the move lower. Since that peak in January though it has been pulling back and is now retesting support at the Simple Moving Averages (SMA). Notice that a Golden Cross is about to print and the relative Strength Index (RSI) is holding in bullish territory despite the Moving Average Convergence Divergence indicator (MACD) diverging, crossing to negative. There is still risk of a further pullback in this stock which may give you a better entry at the rising trend line. On the other hand NutriSystems, $NTRI, looks primed to go. It also fell hard, after its last earnings release in November. It is also stair stepping higher with a series of

NutriSystems, $NTRI

higher lows and higher highs. At the 50 day SMA now it is forming a bull flag for another move higher. It has support from the RSI that is rising and bullish and a MACD that averted a cross to negative. In fact, Thursday’s price action could be interpreted as a move higher from consolidation at the 38.2% Fibonacci level. With a gap fill in sights and resistance above that at 9.70, which coincides with the 61.8% retracement of the move lower and the 200 day SMA, this looks like a much better trade, against a stop in the 8.690 area, than Weight Watchers at the moment.

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Dragonfly Capital Views Performance Through January 2013 Expiry

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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