Stock Of The Day: AbbVie's Rally Looks Stretched — Could A Reversal Be Next?

Core Viewpoint - AbbVie Inc. (ABBV) is experiencing an upward trend in its stock price, gaining over 12% in the past week, but is now considered overbought, which may attract sellers and pressure the stock lower [1][2]. Group 1: Stock Performance - AbbVie has been trading higher, with a notable increase of more than 12% in the past week [1]. - The stock is currently classified as overbought, indicating that it has moved above its normal trading range [1]. Group 2: Market Dynamics - The concept of reversion to the mean suggests that an overbought stock like AbbVie may experience a downward movement, prompting some traders to sell in anticipation of this trend [2]. - The Relative Strength Index (RSI) is highlighted as a popular momentum indicator, with a default time period of 14 days, which currently shows neutral momentum for AbbVie [2][4]. Group 3: Technical Analysis - A 14-day RSI indicates that today's price is roughly the same as it was two weeks ago, not reflecting the recent rally [4]. - Adjusting the RSI time period from 14 to 5 days reveals that AbbVie shares are very overbought, suggesting a potential pause or end to the rally [5].