Game Time Party Prep: Buy the Dip for those Chips

• Posted by Greg Harmon
• on February 2nd, 2011

The next step in preparation for your Super Bowl Party is to Buy the Dip to go along with the Chips (see below) from yesterday. Below are three flavors that I suggest may be worth picking up for your party. These Health Care companies have all experienced significant pullbacks or dips, but are now showing signs that it may be time to buy them.

Abbott Laboratories, Ticker: ABT

Abbott Labs (Ticker: ABT) fell out of a channel between 46.80 and 48.60 two weeks ago.it fell hard but found support just above 45. During the move lower it also fell out of the Bollinger bands. But Tuesday it printed a Morning Star reversal candle, which was confirmed with a move higher Wednesday. It is also back within the Bollinger bands and and the Relative Strength Index (RSI) has bounced off of an oversold condition. The close Wednesday was also above the previous low at the end of November 2010. Look for this to continue higher to resistance first at 46.80 and if through there the stronger resistance at 48.60 above it.

Celgene Corp, Ticker: CELG

Celgene (Ticker: CELG) started the New Year falling after printing a Shooting Star reversal candle. The fall finally halted last friday when it had a strong down day and ended up outside of its Bollinger bands. On the following Monday it printed a long legged doji reversal candle that was confirmed Tuesday with a move higher. During this transition the RSI bottomed and turned higher and it re-entered the Bollinger bands. This move sees its first resistance at about 55.75, near both the low of the real body of the December gap down candle and the consolidation area just before the last leg down in late January.

Merck & Co., Ticker: MRK

Merck & Co. (Ticker: MRK) Had a bit less of a fall coming down from 37.50 on a a gap down in mid January, finding support at 33. After consolidating there for over a week it is now pushing higher, towards the first resistance at 34.85, representing a 23.6% retracement of the major up move from March 2009 to the highs in January 2010. The RSI bottomed during this process as well and is now heading higher to the mid line, and the MACD is improving and about to print a bullish cross higher. If it gets through the Fibonacci level (34.85) then the next resistance comes at 36 and then the gap area near 37.

Now that you have the dips to buy to complement your chips, tomorrow will round out the party prep with some beverage suggestions. Trade’m well.

Stock up on These Chips Before the Game

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