4 Trade Ideas for Abbott Laboratories: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Abbott Laboratories, $ABT, rose off of a bottom in March and continued until a top in April at a new all-time high. It pulled back from there in a rounding fashion and eventually pushed back over that high in July. Over the last 3 weeks it has been building a symmetrical triangle as consolidation tightens. A break out would look for a $5 move in the stock price.

The RSI is holding in the bullish zone but leaking lower. The MACD is crossing down, looking to reset lower. The Bollinger Bands® have turned flat on the topside. All point to slowing if not stalling of momentum. There is no resistance above 102.75. Support lower comes at 99.75 and 98 then 65.50 and 92.50. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.42% and started to trade ex-dividend on July 14th. The company is expected to report earnings next on October 14th.

Looking at the August monthly options chain there is large open interest at the 100 and bigger at the 90 strike on the put side. But the call side open interest at the 100 strike dwarfs everything else. There is large size at 95 and 105 as well. In the September chain the 100 put strike is biggest, but the size builds from 100 to 110 on the call side and it is much larger again. The November options are the first to cover the earnings report and they have largest open interest at the 92.50 put strike. The call side is again much bigger and builds from 97.50 to 105 holding large at 110 as well.

Abbott Laboratories, Ticker: $ABT

Trade Idea 1: Buy the stock on a move over 102.50 with a stop at 100.

Trade Idea 2: Buy the stock on a move over 102.50 and add a September 100/97.50 Put Spread ($1.15) while selling a November 115 Call ($1.56).

Trade Idea 3: Buy the September/November 105 Call Calendar ($3.10) while selling the September 95 Put ($1.33).

Trade Idea 4: Buy the November 95/100/110 Call Spread Risk Reversal for 50 cents.

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the first week of August in the books, saw the dog days of summer were nowhere to be found. Instead equities are finding renewed strength as they moved higher.

Elsewhere look for Gold to continue higher while Crude Oil consolidates in a slow drift up. The US Dollar Index looks to consolidate the move lower while US Treasuries pause in their uptrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets continue to consolidate.

The Volatility Index looks to continue to drift lower making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the IWM and SPY also look strong and ready for more upside. The QQQ, with profit taking, may see some rotation out into the other 2 ETF’s. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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