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AbbVie Ready to Breakdown?

A critical support level has formed in the chart of AbbVie (ABBV). If the stock price falls below this level, a breakdown is expected. Read more to learn how to take advantage of this trade.

A key support level has emerged in the chart of AbbVie Inc. (ABBV).  If the stock price falls below this level, a breakdown is expected.

ABBV is a drug company with leadership roles in therapeutic areas including immunology, hematologic oncology, neuroscience, aesthetics, eye care and women's health. The company's top drug, Humira, represents close to half of the company's current profits.

The company outperformed fourth quarter estimates for earnings and sales. It has been successful in expanding labels for cancer drugs, Imbruvica and Venclexta and has a strong late-stage pipeline. ABBV’s acquisition of Allergan has diversified its revenue into new areas, providing it with additional long-term growth prospects.

ABBV had $8.47 billion in cash as of the end of the latest quarter, but its short-term debt was a little higher at $8.5 billion. Though the company is quite profitable with a return on equity of 34.8%.

While the stock is up over 60% in the past twelve months, it has been trending down over the past month. This has led to a Momentum Grade of D in our POWR Ratings system.

Take a look at the 1-year chart of ABBV below with added notations:

  Chart of ABBV provided by TradingView

ABBV has created a key level of support at the $102 (green) level over the past several months. The stock has made its way back down to that level again, and another bounce took place.

If the support level were to break, a breakdown is expected and lower prices will likely follow for ABBV. Therefore, a trader could enter a short position if the stock were to break $102.

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Have a good trading day!

Good luck!

Christian Tharp, CMT

@cmtstockcoach


ABBV shares were trading at $104.54 per share on Friday morning, up $0.66 (+0.64%). Year-to-date, ABBV has declined -1.29%, versus a 4.97% rise in the benchmark S&P 500 index during the same period.



About the Author: Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.

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