Not to be confused with Abbott Laboratories that uses the same ticker in NY!  This stock simple does not look very bullish to us. Best guess here is that it has done, or is doing,  an a-b-c X a-b-c. It has a nice yield but is trading at a p/e of 77X, a bit rich even for a software company if that is indeed the business they are in.

In two previous blogs (Jan 5 and July 7, 2012) we discussed the likelihood of this stock going either to $72 or $69, depending on how big a triangle , 12 year or 4year, you assumed occurred. Time wise, from the June date we mentioned the possibility of this whole process taking another 2 months which makes it about Sept 7, roughly now. Here is the chart again, showing only the smaller triangle;

The highest reading , so far at least, was at $67.45 just $1.55 away from the target set 8 months ago when ABT was trading at about $10 less. Still we are not perpendicularly above the apex and nor have we used the total width of the channel (purple lines) so $69 or even $72 are still possible. The problem is that these charts do not necessarily show the highs and lows of the day, they are pretty rough. To fine tune this a little here are two more;

In the short-term Big chart above the triangle’s mouth is precisely the distance travelled in the thrust, which would argue that the top is in. However it could well be that the mouth should be measured some 8 months earlier which would add about $3 . This would bring the thrust high to around $70.  It is furthermore possible to count the thrust as having completed 5 waves already. Given that this is little more than a best guess another high should not be excluded. It is fine to split hairs but if you own this stock you should dispose of it now. If you do not own it , it might be a good short, now or a dollar or two higher, next stop is at $41

For less than $5 you can buy a Jan 2014 put with a strike of $60. The Jan 2013 put goes for $1.15. You get what you pay for but the shorter the term the bigger the bang. Rolling over a short-term put is some times the best option.

Here again there is a then ( Jan. 5 2012) and now chart, for the big picture we refer to that blog;

Hard to tell but 1/2 year has gone by. The high , so far, is at $65, the calculated high at that time was about $69. There is the possibility that the “thrust” has already subdivided in 5 separate waves. Often these things peak perpendicularly above the apex, that would allow for a few more months. Looking at the big picture again,there does not seem much risk/reward left to stick around;

Using the various possible triangles and other metrics it is not very likely that this stock will trade above the $69, only 4 dollars away. as the first target is about $42, down $23 from here it works out to 4/23, a 17% chance of winning. Use a very tight stop or simple get out.

Abbott Laboratories  did very well for ten/fifteen years or so and then it started to flat line at around $48. In doing that it differentiated itself from the rest of Big Pharma that for the most part dropped like a stone, see for instance MRK, PFI, LLY and so on. The question now is whether or not it is ahead or behind the group. We would sell the stock as we are in the process of triple topping, always a reason to step aside. There are 3 possible triangles here, one of which has already had its thrust leaving only the possibility of the 10 year triangle thrusting to just over $72 or the present one (see below) going to $69. The alternative count is of course a 1-2 or a series of 1-2’s making the next wave down a little more dramatic.

The risk/reward is such that there is no justification to hold on any longer. There is about $10 to the upside (very maybe) and $30 to the downside (an almost certainty), comparable to playing Russian Roulette with four bullets in the chamber.