Weight Watchers International, Inc. (NASDAQ: WTW)
Weight Watchers International, Inc. (WTW), a weight management company spiked up over 21% as of late afternoon trading on Tuesday. The spike up can be contributed to Oprah Winfrey announcing via Twitter (TWTR) that she lost 26 pounds using the weight watchers program. This is not the first time that WTW has reacted positively to news of Oprah’s weight loss, back in October on the Ellen Degeneres Show she announced that she lost 15 pounds which directly led to a rally in the stock.
WTW Technical Analysis
WTW opened at $11.18, up from the previous close of $11.12. As of late afternoon trading the stock is up over 21% trading at $13.47. The spike up can be contributed to the Oprah losing weight news. WTW has been very active ever since Oprah Winfrey announced she was taking a large stake in the company and becoming a spokeswoman for the company back in October. Taking a look at a 6 month chart you can see a head and shoulders pattern formation dating back to October when Oprah first announced she was partnering with the company. WTW originally gapped up from $7 to $18 in mid October forming the first shoulder. The head formed from the beginning of November to early January when the stock reached highs of $28 and then sloped off at $20. This is where the second shoulder formed and reached lows of $11 before Tuesday’s rally. Even though there is a rally with the Oprah news the stock has been showing a textbook negative pattern formation. Additionally I would be leary of any rally that seems to be solely based on Oprah Winfrey’s personal weight loss. I would expect the original gap of $7 to $18 highly likely to be filled in the coming months. I would look to short any rally with a possible exit price at $7 in the next few months.
Weight Watchers International, Inc. provides weight management services worldwide. The company operates through North America, United Kingdom, Continental Europe, and Other segments. It offers a range of products and services comprising nutritional, exercise, and behavioral tools and approaches. The company also provides various products, including bars, snacks, cookbooks, food, and restaurant guides with PointsPlus values, Weight Watchers magazines, PointsPlus calculators, and fitness kits, as well as ActiveLink products. In addition, it offers online subscription weight management products, such as Weight Watchers Online that offers online and mobile content, functionality, resources, and interactive Web-based weight management plans; and Weight Watchers eTools, an Internet weight management product, which allows users to manage the day-to-day aspects of weight management plans online or via their mobile devices. Further, the company provides applications for mobile devices, including the iPhone, iPad, and Android devices; and third-party products, including Fitbit. Weight Watchers International, Inc. was founded in 1961 and is headquartered in New York, New York. Yahoo Finance