Toni's Position Trader - ABMD

Abiomed (Nasdaq:ABMD) develops devices to assist or replace the pumping function of the heart during high risk surgery. Recently its 2.5Liter Impella device received FDA approval. So far the PROTECT II Clinical trials are showing the 2.5 Liter product to have excellent results, and the feeling is that the Impella device will become the new standard, taking over from the 1.5 Liter products currently on the market, in its niche.

Whenever you get a smallish company who releases a product with a potentially massive market that takes over that market, the impact can be huge. Abiomed has had the same management team in place for some time, and they have continued to follow their game plan with good effect.

Technically speaking the chart looks very good. When we are looking for stocks we start off by sorting for relative strength leaders. This simply means we want to find a stock that do not show as much of a decline as the average stock in the market during periods of market weakness. This shows a degree of buying interest and strength in the stock, and very often when the market recovers, stocks that “held up” during the decline are the leaders when the market recovers. As you can see with ABMD when the market pulled back last week, it was a stock that held up relatively well.

Overall the weekly chart remains in a nice, strong, uptrend, making higher highs and higher lows. Since its peak in late July AMBD has pulled back in a nice and orderly manner, forming a clear bullflag pattern. This pullback has brought AMBD to an area of both moving average and price support. Charts that have multiple forms of support often see the strongest bounces. We will be looking to buy shares of AMBD on a close above $19.00 per share.

- Brandon Fredrickson & Toni Hansen

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Long: SMCI, BSX, LPNT, MKC, BF.B

Brandon Fredickson's Blog: http://p5equities.blogspot.com/
Toni Hansen's Blog: http://www.tonihansen.com/blog