AbbVie Inc. discovers, develops, manufactures, and sells pharmaceutical products worldwide. The company offers HUMIRA, a biologic therapy administered as a subcutaneous injection to treat autoimmune diseases; IMBRUVICA, an oral therapy for the treatment of patients with chronic lymphocytic leukemia; and VIEKIRA PAK, an interferon-free therapy, with or without ribavirin, for the treatment of adults with genotype 1 chronic hepatitis C.
Take a look at the 1-year chart of AbbVie (NYSE: ABBV) below with added notations:
ABBV had been trading mostly sideways for most of the past year. During that time, the stock had created a key resistance level at $66 (green), which was also ABBV’s 52-week high barrier. The stock finally broke above that level in earlier this week, and should now be moving overall higher.
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The Tale of the Tape: ABBV broke its 52-week resistance at $66. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $66 could negate the forecast for a move higher.
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
Follow me on Twitter: @cmtstockcoach