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Abbott Laboratories Message Board

  • snugly60031 snugly60031 Sep 14, 2006 4:44 PM Flag

    Market Near Term Peak

    IMO the near term peak in the S&P will have been made by Friday close. I believe it has been made already this week, but I'll give it one more day for options expiry. If the peak made so far this week holds, it is significant that it failed to surpass the high made in May. That suggests that the the uptrend since Oct '05 lows was broken after the peak in May, and that the trend from here will be characterized by lower highs and lower lows. IMO it is likely that 2007 will be a recession year, so the market should start anticipating that by selling off. As for defensives, such as ABT, IMO they will actually benefit from initial weakness in other sectors as investors seek safe havens. JMHO. Good Luck ABT & HSP Longs. Snug

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    • IMO and JMHO mean what? Sorry for being out of the know. Thanks.

    • It seems likely to me that the market will go a little bit higher this week. After that, IMO it will trend down for a while. Bear in mind that in spite of the bullish or bearish opinions expressed by the "experts" on TV and in print, after the run-up in '03 off the bear market lows of late '02, the market has range traded since the beginning of '04, albeit with an upward trend. So now, we have had a nice run-up off the mid-Summer lows to the top of the range, and now we are due to move back down. Since the market has been in an uptrend since the range trading began in January '04, my guess is that whatever low we experience in the next month or so will not be quite as low as we got during this Summer.
      IMO it is still worth taking profits in stocks you trade and maybe going short the ETF's. I'm looking at again shorting the Q's and SMH, and this time buying some puts on SPY. By the way I did real well last week buying, then selling the Sep 132 SPY calls.
      My other idea is accumulating good stocks in the energy complex during current weakness, and now that they are at relatively depressed levels. I stress "accumulate" a little at a time, because I don't know when this sector will turn. However, eventually it will turn, and these buys will be very rewarding. I like BTU and WHIT.
      Meanwhile, Big Pharma still looks like a sector that will be improving over the medium term. I believe we will see some really good action in SGP. I'm currently long it and ABT in that space. Good Luck. Snug

      • 1 Reply to snugly60031
      • snug,

        i may be wrong, but the place to be has been tech over the last few years. many techs have doubled over the last 3-4 years and some have done much better than that. i think tech will continue to do well but i worry about big pharma in the long run.

        despite us aging baby boomers, there are too many politicians wanting to gain votes by beating up big pharma. the business may be sound, but i am not sure about the politics.


    • Snug,
      You are sorely missed on the 'real' ABT MB!

      Please reconsider and join us, thanks!


    • IMO, ABT's current PE is over 24. I do not believe that I have ever seen it over 26, and then for a short while only. At this point, however, ABT needs to get over the major resistance level of 50. But even if it does go over 50, I can't think it to go much higher, unless its next earnings report is very good. If Snug's scenario comes thru and market takes a hit, I believe ABT will be going down as well.

    • Today, at its high it got to within 0.2 from the May peak. Since it got that close, there may be a little push left in it for early next week. However, whether it surpasses the old high or not I still believe that a significant sell-off is approaching, which will carry the averages lower into October.
      Abbott hit a new 52 week high, which is encouraging, but IMO we still need to see the characteristic gap up to feel confident that the uptrend is continuing. For now, it is nice to see the stock price a little higher, and IMO there will be no need for concern unless the price drops below the 50 day MA. That event should set off alarm bells, but if it continues to drop below the 200 day MA I believe that would be a clear sell signal.
      Good Luck ABT & HSP Longs, Snug

    • I agree with your analogy on the general market, but disagree with the so called safe haven stocks. most of them are up 15-30%. If oil continues to fall, energy plays may be back in favor. Valuations getting steep here.

      • 1 Reply to crib06
      • I agree with your analogy on the general market, but disagree with the so called safe haven stocks. most of them are up 15-30%. If oil continues to fall, energy plays may be back in favor. Valuations getting steep here.<<<<

        Sure, energy could be a play.

        But, I don't see "safe haven" stocks as being overvalued. They are not overvalued, as long as interest rates remain in the 5% range, where they are now, since a PE of 20, is an earnings yield of 5%. Plus, these "safe haven" stocks are, generally speaking, long term "growth" stocks. So, to effectively have the same yield as treasuries, with a growth component tied to products/services in demand during all kinds of economic situations, remains a reasonable strategy, even now.

        Sure, they have had a nice run, but the run has been a moderate one, so any weakness would be just an opportunity to buy more. Plus, from a technical situation, their charts remain in a favorable trend.

        For, ABT, it's PE is not much more than 20. So, it fits fine in a diversified portfolio, in my opinion.

        Personally, my portfolio is ABT, KMB, PG, KO, MMM, MAT, and the utility stock, EAS. I'd love to buy more of any of them on any price weakness.

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