4 Trade Ideas for AbbVie: Bonus Idea

• Posted by Greg Harmon
• on March 4th, 2024

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

AbbVie, $ABBV, had been in broad consolidation in a descending triangle between 134 and 176 for 20 months when it broke out to the upside in January. This gave a target move to 200. It comes into the week in short term consolidation under resistance about halfway through that target move. It has a RSI in the bullish zone, near overbought, with the MACD positive but crossed down. The Bollinger Bands® have squeezed in, often a precursor to a move. There is no resistance above 180. Support lower comes at 175 and 172. Short interest is low under 1%. The stock pays a dividend with an annual yield of 3.47% and will begin trading ex-dividend on April 12th.

The company is expected to report earnings next on April 25th. The March options chain shows biggest open interest at the 160 put strike and at 175 and then 165 on the call side. In the April chain open interest is spread from 175 to 150 on the put side. On the call side it is bigger and spread from 170 to 185. The May chain is the first to cover the earnings report. It has biggest open interest at the 140 put and then 115. On the call side it is biggest at 165 then 140 but spread from 140 to 195.

AbbVie, Ticker: $ABBV

Trade Idea 1: Buy the stock on a move over 180 with a stop at 172.

Trade Idea 2: Buy the stock on a move over 180 and add an April 175/165 Put Spread ($2.25) while selling the May 195 Calls ($1.30).

Trade Idea 3: Buy the April/May 185 Call Calendar ($2.05) and sell the April 170 Put ($1.35).

Trade Idea 4: Buy the May 160/185/195 Call Spread Risk Reversal ($1.50).

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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 month of February in the books, saw equity markets continue to show strength with the small caps now joining the large cap and tech indexes.

Elsewhere look for Gold to continue its assault on a new all-time high while Crude Oil moves higher out of consolidation. The US Dollar Index continues to drift in consolidation while US Treasuries hold in their downtrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets continue to consolidate.

The Volatility Index looks to remain very low and stable creating an environment for equity markets to move to the upside more easily. Their charts look strong, especially on the longer timeframe with the long win streaks for the SPY and QQQ and now the IWM breaking higher. On the shorter timeframe all looks well to as the QQQ and SPY reset their momentum measures early in the week and the IWM showing strength. Use this information as you prepare for the coming week and trad’em well.

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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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