Pharmaceutical giant AbbVie (ABBV) reported earnings Thursday morning, missing slightly on the bottom line with "in-line" revenue numbers. The share price is lower in early trading activity Thursday.
Let's check out the charts and technical indicators.
In the daily bar chart of ABBV, below, I can see the price action through Wednesday's close. I have to imagine prices trading around $151 or something like that early Thursday. I can see that prices made a high on Tuesday and declined on Wednesday. The shares are likely to test the rising 200-day moving average line. Looking at the movement of ABBV the past 12 months I can see that sometimes prices held above the 200-day average and sometimes the line was broken for an extended period of time.
The daily On-Balance-Volume (OBV) line shows strength ahead of Thursday's earnings report. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but is likely to turn lower today for a take profit sell signal.
In the weekly Japanese candlestick chart of ABBV, below, covering the past three years I can see a longer-term uptrend. This chart won't be updated until Friday's close but we can imagine that prices will likely decline to test the rising 40-week moving average line. If prices rebound from this test of this indicator we will see a lower shadow and that would be a positive development.
The weekly OBV line shows a long-term rise to confirm the price gains of the past three years. The MACD oscillator is bullish.
In this daily Point and Figure chart of ABBV, below, I can see a potential upside price target in the $207 area. A trade at $144 would weaken this chart.
In this weekly Point and Figure chart of ABBV, below, I see a potential price target in the $203 area. A trade at $145.04 would weaken things.
Bottom-line strategy: ABBV is probably going to test the 200-day moving average line and the 40-week moving average line. Will traders and investors buy this pullback? Looking at the past three years of price action would tell me yes, but the recent weak performance of the broader market averages gives me pause. Let's wait but be ready to buy provided a lower shadow forms on the candlestick chart.
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