Fairlead Strategies Idea Generator

AbbVie (ABBV) & Updates (FCX, KR, PSQ, UEC)

This week’s pullback has been a drag on most stocks, including Kroger (KR) and Uranium Energy Corp. (UEC) which fell below their stop-loss levels today, respectively $47.90 and $4.08. We would close long positions if they look poised for a second close below those levels tomorrow afternoon. We would give Freeport-McMoRan (FCX) room to its 50-day MA (~$29.60). For the inverse ProShares Short QQQ ETF (PSQ), we are revising our target higher to $15.02 from $13.89.

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To take advantage of relative strength, our newest idea is AbbVie (ABBV), which has outperformed recently with other defensive health care stocks.

• ABBV looks poised for an oversold bounce within its long-term uptrend, which remains intact per the weekly cloud model. An oversold upturn in the weekly stochastics and a loss of downside momentum in weekly MACD support a recovery.

• In its ratio versus the S&P 500 Index (SPX), ABBV has a short-term breakout after holding support at its rising 200-day moving average. The action suggests ABBV should resume its YTD trend of outperformance after having lagged this summer.

• Resistance from prior peaks near $157 can be used as an upside target. A tight stop-loss level can be gauged by the weekly cloud, currently near $140 and rising, which we would uphold on a weekly (Friday) closing basis.

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AbbVie (ABBV, $142.51)

Target: $157

Stop-Loss: $140