This impressive move extends the stock's gain off this week's low to 3.75% and is setting the stage for an upside breakout.
During the Brexit flush, AbbVie held a key support zone. The stock bottomed on June 27 just above its scooping 200-day moving average. This key area, near $58.50, also held the May low. AbbVie mounted a powerful rally as June came to an end and, by mid-August, was trading at new 52-week highs. The stock stalled near $68 on Aug. 15 and has been in pullback mode since.
Earlier this month, AbbVie finally began to regain its footing near the $62.50 area after dropping over 8% from the highs. This was the beginning of the bottoming process. This week, the initial September low was successfully retested, and the aftermath has been quite bullish.
In the near term, AbbVie bulls should take a more bullish view of the stock. AbbVie is now a low-risk buy between $65 and $64. On the upside, a move into new September highs will be a key hurdle. With a fairly high short interest ratio of 6, the bears will begin to feel the heat as new September highs are reached. This will add extra juice to a new rally leg. On the downside, a close back below $62.50 will violate the September low, indicating that more basing will be needed before AbbVie is back on solid ground.
This article is commentary by an independent contributor. At the time of publication, the author was long ABBV.