Abbott Laboratories engages in the discovery, development, manufacture, and sale of a broad and diversified line of health care products. It operates through the following segments: Established Pharmaceutical Products, Nutritional Products, Diagnostic Products, Cardiovascular and Neuromodulation Products, and Other.
Take a look at the 1-year chart of Abbott (NYSE: ABT) below with my added notations:
ABT has hit the $86 mark (red) as resistance multiple times over the past several months. The stock has recently reached that level again, and now could be looking to finally break higher. A solid close above $86 should lead to much higher prices for ABT.
The Tale of the Tape: ABT has a key level of resistance at $86. A long trade could be entered on a hold above that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $86.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT