Abbott Labs (ABT)

By JC Parets Tue, Jun 23, 2020

Hey there,

We’ve been seeing a ton of sector rotation lately, and I believe next up is medical devices.

This sector has been coming up in conversation for the first time in a while.

Even though medical devices are in healthcare, they act like tech (because that’s what they really are).

And when it comes to to the medical devices index, the stock to own is Abbott Labs (NYSE: ABT)

ABT is the biggest (14%) component of the US medical equipment index.

Just look at this BEAUTIFUL long term uptrend. It’s a classic example of fibonacci extensions continuing to come into play not just to set price targets, but also manage risk.

The low from March was the exact Fibonacci extension from that 1999-2007 correction.

And that’s the level we’re watching right now.

I like ABT long above 91.

If we’re below 91, we’re out.

But above 91, we’re long with a price target of 138, the next fibonacci extension.

As usual, this is a great risk to reward ratio in our favor.

Til next week, good trading,

JC Parets

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About the Author

JC Parets, founder of All Star Charts, specializes in finding the most opportunistic risk vs. reward propositions while at the same time bringing a top/down approach to the marketplace whose wide spectrum is rivaled by few. JC begins with a long-term global macro perspective and then works his way down to the individual sector and industry level before ultimately isolating the stocks that best portray a particular thesis. Price is the most important technical indicator, but JC uses supplements such as Momentum, Relative Strength, and Fibonacci analysis to complete the process.