Public trading strategy
AbbVie bets $10.9 billion on new skin drugs — buy the pharma giant on the dip
Thesis
AbbVie is using its massive cash reserves to buy next-generation skin treatments, a smart move to replace revenue as some of their older top-selling drugs face new competition. Big acquisitions like this usually signal that the acquiring company's management is confident in their financial future and wants to keep growing. Since AbbVie is a giant, stable pharmaceutical company, buying on any temporary dip caused by the acquisition announcement offers a relatively safe way to benefit from their expanded drug lineup.
Strategy approach
Build a mean-reversion strategy that enters long ABBV on D1 when the price is within 2% above the 20-day SMA and RSI(14) < 45, with a 21-day max hold and a 5% stop loss.
Markets and timeframes
ABBVD1