On July 23, the price of Abbott Lab (ABT) had convincingly broken through the key resistance level of $118.78. At the same time, it had also breached a more recent and important resistance level at $120.24.
In addition, this is also a breakout from a double bottom. When the price breaks out of a double bottom and 2 important resistances at the same time, it is considered a good typical price breakout in technical analysis. Traders may consider buying the stock at the current level.
Also, there was a “price gap up” on July 23. This is a very bullish sign, as an upward price gap means that the lowest price of the day was not lower than or equal to the highest price of the previous day.
The bullish bias of the price gap was reinforced by a bullish doji that formed on July 22. This doji was a sign that the downtrend was reversing.
From an indicator perspective, the price breakout on July 22 was accompanied by the Golden Cross of the Supertrend indicator. In addition to the Supertrend indicator, the Golden Cross signal was also detected in the Random Walk Index, Elder Fisher Transform and Elder Ray indicators.
If these 4 indicators trigger a Golden Cross signal at the same time, it is more likely that the price breakout is sustainable, and the price will continue to rise.
Traders looking to buy Abbott at current levels can set their price target at $125.41. That was the last high reached around April 13. At the same time, the stop loss price should be set at $116.27, which is near the low of the doji candle.