The arrow in the current chart below marks when that call was made. While the shares went significantly higher it should be obvious that the call was busted almost the next day by that spike and thus the prudent trader would have gotten stopped out. After that came just 3 waves down and not 5 meaning a buy signal was presented. This is the difference between an EW model and a Jim Cramer "call". He never tells you when to abandon the trade whereas it is built right into every EW count where the disciplined trader will bail.
In any case, the stock then put in a 5th wave rally and then fell back to the level of the prior 4th. So at this point it is very unclear as to whether this will turn out to be a buying op for the stock or time to sell. But we can guess that Wall St darling Abbott Labs will be trading with the broader markets. So the key thing to wonder right now is whether that pullback was 5 waves or 3 and, at least for right now, I'm counting it as 5 down. IF this is the case it should find resistance at the usual turning points.
So IFF this bearish model is correct then we should see resistance at the 38.2, the level of the prior 4th, or the 61.8 which in this case has a gap near it. As you can see this current found resistance and perhaps a top at the 38.2. But that could turn out to just be a pause. We really need to see more data and the level of the prior 4th is calling. Time will tell but if the 38.2 cannot contain this then I would be backing off of shorts big time, and not just necessarily on ABT or on big pharma but on the whole market in general. But if the 38.2 can hold this down then it is very bearish indeed because in all fairness the level of the prior 4th should be the magnet.
In any case, a break below the lower rail would be a wake up call for the stock markets. As in woken up to the sound of air raid sirens wailing...
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