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Abbott Labs Worth A Look

12/13/12 08:13:43 AM
by Koos van der Merwe

With President Obama in office for another four years and Obamacare a certainty, investing in health-care stocks and laboratories is an investment to look at.

Security:   ABT
Position:   Buy

Abbott Laboratories (ABT) was named one of the US's most community-minded companies in "the Civic 50" survey, one of Standard & Poor's 500 corporations that best use their time, talent, and resources to improve the quality of life in communities where they do business.

With the advent of Obamacare, where medical treatment will be available to all in the United States, drugs manufactured by Abbott Labs will be available to all. They will become more competitive with generic manufacturers whose drug copies may not be as therapeutically effective as the original.

FIGURE 1. ABT, WEEKLY
Graphic provided by: AdvancedGET.
 
Figure 1 is a weekly chart of ABT, with an Elliott wave count suggesting the completion of a wave 4 down. The relative strength index (RSI) is, however, suggesting that there could be more downside, with the ABC correction shown on the chart with question marks. The color of the bars are red, suggesting weakness.

FIGURE 2: ABT, DAILY
Graphic provided by: AdvancedGET.
 
The daily chart in Figure 2 is confirming the rise into what could possibly be a b wave in a wave 4 correction. The RSI is in a bull trend; the closing price of Friday, December 7, broke above the upper band of the JM internal band indicator, confirming the buy's signal. The color of the bars is also blue, suggesting a positive trend, but the possibility that the rise could be a wave b in a wave 4 correction still exists.

For the short term, Abbott Laboratories is a buy, but I would watch the RSI closely and keep my stop signals close.




Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address: petroosp@gmail.com

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