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After experiencing some profit-taking in the aftermath of the company’s most recent earnings announcement on Oct. 18, Abbott Laboratories (NYSE:ABT) has stabilized and completed a bullish “wedge” continuation pattern on Thursday by breaking above the down-trending resistance level that started in mid-October. We expect the stock to climb back up to its recent high of $56.68 and then continue on to set new highs.
Medical-device companies like ABT have done well this year, but some have been concerned the industry could struggle if Congress fails to extend the two-year moratorium on the medical-device excise tax it put in place at the end of 2015 with the Consolidated Appropriations Act. However, even though Congress is dealing with multiple legislative concerns, we fully expect it will extend the moratorium.
‘Buy to open’ the ABT December 55 Call (ABT171215C00055000) for a maximum price of $1.30.
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