In his "No-Huddle Offense" segment of Mad Money Wednesday night, Jim Cramer said that as the market is slaughtering the high-growth stocks, those with dividends are coming back into fashion. But not all dividend stocks are created equal.
That's why Cramer recommended AbbVie (ABBV) , which will soon close on its acquisition of Allergan (AGN) . Cramer said Wall Street is only now waking up to just how transformative Allergan will be to AbbVie, and now's the time to take advantage as the combined company will have both growth and an excellent dividend yield.
In addition to the yield let's check out the charts of ABBV.
In this daily bar chart of ABBV, below, we can see that prices have declined the past 12 months but now ABBV is testing the declining 200-day moving average line and the slope of the 50-day moving average line is positive.
The On-Balance-Volume (OBV) line has turned up telling us that buyers of ABBV have now turned aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line in bullish territory which is something that has not happened for most of the past year.
In this weekly bar chart of ABBV, below, we can see that the price of ABBV has been in a downtrend from early 2018. Prices are testing the declining 40-week moving average line.
The weekly OBV line has shown improvement the past three months and the MACD oscillator crossed to the upside in September generating a cover shorts buy signal.
In this weekly Point and Figure chart of ABBV, below, we can see the recent price improvement as well as the breaking of a long-term downtrend. A projected price target of $97 is shown. If this target is reached it will mean that prices have broken above the December high.
Bottom line strategy: Traders could probe the long side of ABBV and risk to $70 for now. ABBV has some chart resistance around $80 but if that level becomes broken, then traders should add to longs. $97 is our Point and Figure price target for now.