During Thursday's "Mad Money" program, Jim Cramer looked ahead to a number of companies reporting earnings this week. On Thursday Abbott Laboratories (ABT) is set to report its latest quarterly numbers. Cramer was bullish on Abbott Labs as they continue to ramp up their molecular point-of-care test for COVID-19. Let's check on the charts and indicators of ABT.
In this daily bar chart of ABT, below, we can see the strong recovery in prices from the March nadir. ABT is above, for now, the 50-day and 200-day moving average lines. Because I anticipate that the broad market could retreat this week I expect ABT to weaken, too. Trading volume has been heavier than average the past six weeks, but it could decline this week if we see a light volume pull back. The On-Balance-Volume (OBV) line shows a pick up from late March, which suggests a shift from more aggressive selling to more aggressive buying. Perhaps, the OBV line can become stable this week as prices correct a bit. The Moving Average Convergence Divergence (MACD) oscillator has moved back to the zero-line for a potential outright-buy signal. This signal might be pushed back a week or so.
In this weekly Japanese candlestick chart of ABT, below, we can see a long lower shadow in late March as traders and investors rejected those low prices. Prices are testing the declining 40-week moving average line. The weekly OBV line is very strong and made a new high for the move up foreshadowing, I hope to see a new price high soon. The MACD oscillator on this longer time frame is below the zero-line and only starting to narrow. An outright go-long signal may not happen until May or June, depending on the price action in the weeks ahead.
In this daily Point and Figure chart of ABT, below, we can see that a trade at $92.69 is needed on this chart for an upside breakout. A potential price target of $128 is shown.
Bottom line strategy: ABT is trading lower so far this Monday. This could be the start of a dip back into the $80-$75 area in the next week. Traders could use this pullback to go long ABT.
