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Market’s Recent Strength Nudges 3 Stocks Into Breakouts

These stocks are challenging their trading ceilings

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Stocks still are stuck in the mud? Not so fast there, partner. While it’s true some stocks still are trapped in a trading range (even with last Friday’s surge to new multiweek highs for the market), a few stocks have gotten over key technical hurdles. As such, they might be better positioned to get — and stay — in a bullish groove. Take a look.

Abbott Laboratories

Abbott Laboratories ABT
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For years — yes, years — Abbott Laboratories (NYSE:ABT) has been stuck in a rut around the $51 level. With just a quick glance, it simply looked range-bound, and content to be so; no need to bother with owning it. A closer look at the chart, though, coupled with what happened last week, now reveals there was a whole lot more going on with ABT — and a whole lot more still to come.

Since mid-2008, Abbott actually has been getting squeezed into the tip of a long-term wedge shape (framed by dashed lines on the chart). With the falling resistance line on top and the rising support line on the bottom being on an intercept course, the wedge shape can’t last indefinitely — eventually, the stock will have to move above the ceiling or under the floor. Given the lengthy gestation period, though, those breakouts or breakdowns tend to just the beginning of major moves.

As of last week, ABT has punched through the upper edge of the wedge shape, dropping a major bullish clue as a result.

There’s supporting news behind the move, too. The company topped its Q3 earnings estimates by a penny, then followed that news up by adding it could garner $4 billion annually in new drug sales by continuing to develop three new therapies. Also, its ARCHITECT analysis platform is now the underlying technology for the Active-B12 assay, which should greatly improve sales of the testing equipment.

After four consecutive earnings beats and some plausible hints that the company can grow, shares finally are starting to reflect the company’s potential.

Article printed from InvestorPlace Media,

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