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Pharmaceutical Stocks, ABT Breaking Out of a Base, While JNJ, MRK, Follow Suit

Pharmaceutical stocks are showing signs of investor and fund manager buying as ABT breaks out of a flat base that formed over the past eighteen (18) weeks. Volume is increasing as it follows through.

Abbott Labs ABT

Abbott’s (ABT) relative strength index (RSI) suggests what started yesterday might follow-through. In addition, MACD indicates the bulls have control as momentum shifts to the bulls and the indicator accelerates from its bullish positioning above the signal line. Both lines are rising. Daily price range is expanding and closes are more frequently at the high of the day. We would use an initial stop under 74.00 (+/-) and trail as the stock rises.


ABT Daily


Merck & Co. (MRK)

Merck is in a similar situation, following ABT to higher levels. We’re anticipating a break out from its base in short order. Volume is increasing. MACD is charging higher, positioned above its signal line with persistent bullish momentum. There is very little overhead supply to slow price action, as VBP illustrates.


MRK Daily


We already have a position in Johnson & Johnson. Targeting 138-140 (+/-) zone. JNJ has similar characteristics as ABT, and MRK with MACD above its signal line, RSI rising and volume increasing. We will continue adding as the stocks cleared the 50d.

Horizon Pharmaceuticals (HZNP) is on the weekly watchlist. Targets are on the list.

Futures are green again this morning.

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Happy Trading,


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