ABBVIE

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AbbVie (NYSE: ABBV) is a U.S. based biopharmaceutical company that was created in 2013 as a spin-off from the pharmaceutical company Abbott Laboratories. While AbbVie is based in the U.S., it is a global company, with over 30,000 employees in more than 75 countries around the world. It is research-driven, coming up with innovative therapies for some of the most difficult, complex, and critical illnesses and diseases. AbbVie’s mission is for its dedicated team of experts to uniquely approach innovations that lead to better treatments in the areas of neuroscience, virology, oncology, and immunology.

AbbVie Split from Abbott Labs

Abbott Laboratories announced on October 19, 2011, its plans to spin-off a new publicly traded company that would operate as a research-based manufacturer of pharmaceuticals. The original Abbott Labs continued to specialise in a diverse range of health and medical products, such as nutritional products, diagnostic equipment, and medical devices. The split took place on January 1, 2013, and AbbVie was listed on the NYSE the next day with the ticker ABBV. Incidentally, Abbott stocks (NYSE: ABT) have seen massive growth since the split, rising from $32.90 on January 1, 2013, to $87.01 on January 1, 2020. The purpose of splitting into two separate companies was to allow markets to evaluate the value of the two businesses separately, according to Abbott Labs CEO Miles White. According to White, investors would be able to benefit from the two strategically different business priorities and profiles. While that may be true, some investors at the time felt the split was done to protect the value of Abbot Labs devices business from a loss of value when the patents on Humira expired. That one drug was responsible for roughly half the drug divisions’ revenues, and indeed AbbVie has seen profits for Humira shrinking since the expiration of the patent as generic alternatives have come to market.

AbbVie Stocks Price History

AbbVie began trading on the NYSE on January 2, 2013, making the company just over seven years old as 2020 is starting. In that time, AbbVie stocks have experienced both ups and downs. Let’s look at how the stock has performed over the past seven years, and then we’ll get some trading ideas based on where we might think the stock price is headed in the future. Holders of Abbott stocks as of December 12, 2012, received shares of AbbVie on a 1:1 basis. AbbVie stocks were valued at $34.75 a share at the open of trading on January 2, 2013. The stock definitely got off to a good start as it traded steadily higher over the coming 23 months, reaching a high of $69.50 in November 2014.

Sideways Trading for AbbVie Stocks

Following that November 2014 high shares pulled back, reaching $54.78 in March 2015 for a loss of roughly 20%. From there AbbVie stock turned sideways, trading in a range of roughly $50 to $70 over the next two years. The stock finally broke out of the range in June 2017, which was the start of a strong rally.

AbbVie Stocks Turn Parabolic

The 2017 rally in AbbVie shares was sparked by news that the company was able to protect itself from biosimilar products to Humira, whose patent expired in 2017. This meant AbbVie would continue to rake in revenues from Humira, which contributed roughly two-thirds of AbbVie’s revenues. After breaking out of its two-year long range bound trade AbbVie stocks climbed rapidly, in a parabolic fashion, with shares reaching a high of $125.86 in January 2018. The stock price held at those elevated levels for one more month, but then turned over. The stock spent the next 18 months falling, finally reaching a bottom at $62.66 in August 2019. Since that time shares have reversed course, heading sharply higher in the second half of 2019. Heading into 2020 AbbVie stocks are trading at $88.17 a share for a gain of roughly 40% in just four months.

AbbVie Trading Ideas

AbbVie saw its first drop in Humira revenues in the third quarter of 2019, but investors seemed unfazed as overall revenues still increased. The company does have a pipeline of new drugs coming and is also acquiring Allergan, which will give it the famed Botox as one of its stable of drugs. So how will we trade AbbVie based on this knowledge? The Allergan purchase sparked the rally that saw AbbVie stocks gain 40% in the final months of 2019. Obviously, we can’t count on further acquisitions to extend that rally right now, but investors can be somewhat mollified by the fact that Humira continues to enjoy its patent protection in the U.S. through 2023.

Sideways Trade in AbbVie Stocks

As of January 2020, we can see from the daily chart that the Allergan inspired rally is clearly at an end, but AbbVie stock is holding on to its gains. Since mid-November 2019 the stock is trading sideways in a range of $86 to $90. Of course, that gives a nimble trader the chance to trade this range, buying at the bottom, and selling at the top. It’s also worth noting the 50-day moving average for AbbVie is currently sitting at $86.44 and providing stiff support. In addition to trading within the range, more aggressive traders could look for a breakout move in either direction. A close below the 50-day moving average would be a good first sign to short AbbVie stocks. Alternatively, a close above $90.47 would be a good buy signal.

In Conclusion

AbbVie currently faces some uncertainty, from the growing number of biosimilar alternatives to its blockbuster Humira drug, to the pros and cons of purchasing Allergan for $63 billion. There are even some questions about whether U.S. regulators will allow the Allergan deal to go through. All these things together make AbbVie a difficult stock to analyse right now. Fortunately, AvaTrade has released a new and improved version of MetaTrader 5 which will allow prospective AbbVie traders the chance to analyse the stock in depth, using the 38 different technical indicators that have been built into the MT5 platform. New to experienced traders can all take advantage of the power of the new and improved MetaTrader 5 platform to trade AbbVie and hundreds of other stocks. Plus, the MT5 platform also makes commodities, indices, and cryptocurrencies available to trade.

AvaTrade AbbVie Inc. Stock Trading Information

• MT4/MT5 Stock Symbol: #ABBVIE
• Trading Hours: Monday – Friday 14:30 – 20:59 GMT
• Currency: USD
• Country: USA
• Exchange: NYSE
• Leverage: Up to

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ABBVIE Stock FAQ

• Why should I trade AbbVie shares?

  AbbVie is in the ever-volatile biopharmaceutical sector, which is always presenting good opportunities for traders. Historically the stock tends to trend very strongly, and if traders are able to catch breakout moves as they are starting excellent profits can be had. The stock tends to be particularly sensitive around its earnings release dates, and can react strongly when earnings are either missed or beat. The stock has been consistent in beating earnings projections recently, and is expected to be a strong player in its industry in the upcoming several years.

   
• Is AbbVie the best biopharmaceutical stock for traders?

  The biopharmaceutical sector is loaded with companies and stocks that traders can speculate on. Some are obviously better than others, but AbbVie can certainly be considered near the top of the list. It holds the patent on the blockbuster anti-inflammatory Humira, and has recently completed an acquisition of the firm Allergan, which will help to boost and stabilize earnings going forward. In terms of earnings, the company has seen strong results lately, and is consistent in beating analyst expectations, which recommends the stock for trading near earnings releases.

   
• What’s the best strategy for trading AbbVie shares?

  Since AbbVie is a highly volatile stock with a tendency to gain very strong momentum once it begins moving in one direction or another, traders are able to use a simple moving average cross strategy to profit from the stock. This works because the stock can often make sudden turns in response to earnings or to milestones in the drug development process. The 200-day moving average is a good trigger to use in this type of trade, buying as price crosses above the level, and selling if price drops below the level.