ResMed (RMD) provides products for the treatment of sleep-related breathing disorders, including sleep apnea, Chronic Obstructive Pulmonary Disease (COPD), and other respiratory conditions.
“The share price has recently come under huge pressure from concerns that diabetic drugs such as Ozempic could help people lose weight and therefore reduce the need for ResMed’s products,” Michael said.
“The premise was that with obesity being one of the causes of sleep apnea, less obesity in the world would be a negative for ResMed.
“However, although the theory was far-fetched and the sell-off in RMD shares was illogical, it was worth waiting for a clear sign of a low before buying in.
“We have now seen that sign that RMD shares have found a low.
“RMD has obviously looked oversold on all time frames, it was just a case of waiting for the reversal signal.
“We now have that, with RMD forming a bullish engulfing candle (circled) on the weekly chart. “Volumes have also been very high on the way back up.
“It may drift sideways for a few days, but it’s highly likely that the low is in place and current levels are a buying opportunity,” Michael said.
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