Abbott Laboratories Inc. (ABT) has been trading in a choppy range since October. But Abbott's stock price now looks ready for an upside breakout. Let's check the charts and indicators.
In the daily bar chart of Action Alerts PLUS holding ABT, below, we can see the rising 200-day moving average line has defined the uptrend the past year, with dips to the average line representing buying opportunities. There is a dip in early May, and dips in late December and early January that have so far proved profitable.
Prices are above the rising 50-day moving average line now. Look at the volume of trading since late September -- heavier than in previous months. Heavy volume in a sideways consolidation pattern is a little unusual as volume tends to diminish. This increased volume could be a "tell" that buyers are bullish and looking ahead.
The trend of the daily On-Balance-Volume, or OBV, line confirms this idea, as it has been trending higher during this sideways price period. In the lower panel is the 12-day price momentum study. In late December and early January, ABT makes equal lows around $66, but the momentum study makes higher lows and this is a bullish divergence. Bullish divergences can be leading indicators and foreshadow higher prices.
In this weekly bar chart of ABT, below, we can see a long uptrend. Prices have been above the rising 40-week moving average line for the past two years. The weekly OBV line has been strong too, but shows a sideways pattern in recent months. The daily OBV looks much stronger. The weekly Moving Average Convergence Divergence, or MACD, oscillator has been above the zero line since early 2017 and is poised for another bullish upside crossover.
In this Point and Figure chart of ABT, below, we can see an upside price target of $80.86. A trade at $72.27 will be a double top breakout.
Bottom-line strategy: ABT is ready to break out on the upside. Good long on a trade above $72.27 and risk a close below $67 looking for $80 as the first price target.