Investors in Dividend Stock Advisor holding AbbVie (ABBV) seem to be happy with the latest earnings report, pushing the share price to a new high for the move up. Sounds good but we know to look under the hood too.
In this daily chart of ABBV, above, we can see that prices are above the rising 50-day simple moving average line. ABBV is also above the rising 200-day line. The On-Balance-Volume (OBV) line turned up in early March showing that the buyers of ABBV had become more aggressive with the volume of shares traded being heavier on days when ABBV closed higher.
In the lower panel we can see that momentum is weakening. Prices have gone up but the pace of the advance has slowed. This slowing momentum picture can foreshadow a decline at times.
In this three year weekly chart of ABBV, above, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has been soft the past three months and suggests that investors have been selling into strength. Momentum is pointed down.
With resistance above the market in the $68 to $72 area and a pattern of weakening momentum and possible scale up selling by longs, I would consider raising your sell stop protection to a close below $61. If ABBV keeps climbing -- great. If a reversal occurs at least you will have a level that tells you when to leave.