AmerisourceBergen Corp. (ABC) is trading up strongly Wednesday on the heels of reports of a potential settlement on over 2,000 lawsuits brought by state and local governments over the opioid epidemic. Let's check out the charts of ABC to see if this price strength is sustainable.
In the weekly bar chart of ABC, below, we can see that prices have been stuck in a sideways trading range the past three years. Prices are above the rising 40-week moving average line.
The weekly OBV line shows improvement from April and the MACD oscillator is above the zero line and narrowing toward a possible fresh buy signal.
In this Point and Figure chart of ABC, below, we can see Wednesday's strength and an upside price target of $105. A decline to $79.05 would weaken the chart.
Bottom-line strategy: Traders could go long ABC on any intra-day dip or temporary pullback. Risk below $80 and the $102 area is our first price target.
