5/12/19

 

We’ll find out on Monday (5/13), if the trend for ABBV downward is going to continue or if we have a reversal.  Once a trend line gets to -90% annualized, there’s not much room for error on the analysis.

 

With ABBV trending lower for over a year, we’ve already established the up-thrust and test scenario. 

 

In addition, the wild swings from January ’18 to January ’19 are over and price action has become tight. 

 

Tight action is a coil; providing thrust for the next major move

 

As with TSM, the expectation (for a bearish set-up) is that we get some kind of inside day or a continuation lower.

 

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5/4/19 & 5/10/19, mid session

 

The two charts of ABBV, show expected and actual price action.  Click on one of the charts and then use the right arrow to toggle between the two.


4/19/19

 

ABBV:  Now Comes The Test

 

ABBV broke below support at 80 and moved easily lower to 76.81, before slowing and starting a possible retrace.

 

At the same time, the entire biotech sector (IBB) broke below its support level around 106, and moved lower.

 

Next week, we’ll be watching for some kind of underside test in the 79 – 80 area for ABBV.

 

The annotated chart shows a potential example of price action.  No one knows exactly what will happen; ABBV could open gap-lower or higher at the next session.

 

However, so far price action is well behaved; indicating it's on track for an underside test.

 

The fact that ABBV has failed its breakout with an up-thrust, tells us we’re correct (thus far) to focus on this particular vehicle in the biotech sector.

 

Looking at the put options table for next week (expiring 4/26), shows high volume activity in the 77.00 put at 2,194 contracts.  If that volume results in a correspondingly high level of open interest, then we’ll have available sellers (low bid/ask) if ABBV begins a retrace.

 

Currently priced at 1.36 -1.46, it’s way too expensive.  If there is a retrace and if that retrace can last a few days before reversal, the bid/ask on the 77.00 may drop significantly.

 

Ideally, something below 0.50 and preferably below 0.25 is the target price.  If we can’t get a bid/ask at that level, then going lower (i.e. to a 75.00 strike) in the put table may be required.

 

Of course, all of this depends on the price action of ABBV itself.

 

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4/15/19:  ABBV Update

 

With about 3,300 shares traded in ABBV during the pre-market, it looks as if we’ll open just a bit higher.

 

A natural market behavior would be to attempt a move off the 80-level support.

 

Let's see how that goes.  If price action pushes significantly below that level, then our up-thrust has another data point of confirmation.  


4/13/19

 

ABBV Danger Point

 

What happens next week may tip the scales away from a major drop in ABBV or set the stage.

 

There’s confirmation of the right side channel line with last week's pull-back. 

 

We’re currently in up-thrust position.

 

If the 80-area does not hold, the downside is at hand

 

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4/10/19

 

AbbVie Zombie

 

For the past two and a half months, ABBV has been congesting in a tight range only to blip above established resistance.

 

As the S&P marches on higher, we’re on the lookout for equities that are not participating; or even better, have their own agenda.

 

ABBV looks like it might be in a class of its own. 

 

BigCharts lists the dividend yield as 5.18%.  One wonders how long that can last with a Book Value at minus - 5.65, and Debt to Equity also minus at a whopping - 414.40%. (www.worden.com)

 

I’m not sure I’ve ever seen a minus debt to equity … that’s new.  You’re welcome to help me out on that.

 

Then there’s the headquarters location.  Chicago, Illinois.  What a wonderful place to work.  If I don’t get shot on my way to work, I can always turn on the news to find out which one of my co-workers did.

 

How can an entity like this attract quality employees?

 

Price action is languishing and may be at a pivot point.  We’re watching to see if the upside breakout holds or fails. 

 

Failure, obviously results in opportunity for the downside

 

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