Novartis recently reported earnings and has been trading near its recent highs, pressing against the neckline of a potential inverse head-and-shoulders pattern. If the stock can break above resistance, it could reach an upside target of approximately $176, marking a bullish reversal after a long consolidation phase.
The stock has shown resilience, maintaining its position above the rising 40-week moving average since spring 2025, which aligns with the 200-day moving average. The 14-week RSI has remained above the critical 50 level, indicating a strong long-term trend. Since its low in late 2024, Novartis has rallied about 50%, raising questions about its future upside potential.
Historical comparisons suggest that as long as the RSI stays near 50 and the stock holds above the moving average, the uptrend is likely to continue. Novartis is primarily held in healthcare-focused ETFs, particularly the VanEck Pharmaceutical ETF (PPH), where it is the second-largest holding.
Although it has lagged behind PPH recently, the stock's relative strength remains intact, suggesting a potential bounce back. Overall, Novartis appears poised for a short-term breakout while maintaining a solid long-term uptrend both absolutely and relative to its pharmaceutical peers