February is historically the second-worst month for the S&P 500. Down half a percent on average over the last 20 years.

Tech stocks are getting crushed. Everyone’s wondering if the AI trade is dead. Smart money is rotating into safe-haven assets while retail panics about their growth names.

I’m looking at something completely different: Abbott Labs (ABT) just handed us a perfect storm setup that most traders are missing.

Abbott had one of its worst moves in 20 years, creating what I call a “gift gap” setup. When a stock gaps down from $120 to around $100, it creates a complete vacuum with no built-in resistance levels.

All that space between the gap down and where it was trading before? There’s literally nothing there. No preset resistance levels. No overhead supply. Just empty air.

But here’s the critical part most traders screw up – you can’t just buy every gap and pray it fills. You need confirmation that the market actually wants to fill that gap.

Abbott is giving us that confirmation. The stock is already moving back up into that unfilled gap space. When I see that 10% move back toward the gap starting to happen, that’s my signal the gap fill is legitimate.

Microsoft had a gap too. Know what happened there? Nothing. No buyers stepped in. No move back toward the gap. That’s not a gift gap trade – that’s a trap. Abbott is different. Abbott is working.

February is reassessment month.

People are looking at their portfolios, paying Christmas bills, wondering if last year’s winners can keep running. The answer for most tech names? Probably not.

When you see stocks like Palantir reporting great earnings and immediately getting sold – what I call the “black candle of death” – that tells you sentiment has shifted. Institutional money is rotating out of high-beta names and into companies that make products people actually need.

Abbott Labs makes medical devices, diagnostics, pharmaceuticals. Recession or no recession, people still need medical care. And right now, that defensive positioning is exactly what smart money wants.

From current levels around $110, Abbott has a clear path back to $120 to fill that gift gap completely. That’s roughly a $10 move on a $110 stock. But if this defensive rotation really takes hold through February, there’s no reason Abbott stops at gap fill.

Look at the monthly chart. That $110 level has history. We’re seeing buyers step in because they recognize value. Unlike the growth names everyone’s worried about, Abbott trades at reasonable multiples.

This isn’t about predicting the market’s next move. It’s about positioning yourself where the probabilities are highest. Abbott checks every box: defensive sector rotation, gift gap setup with confirmation, reasonable valuation, and a clear path higher with no technical resistance.

Your Action Plan

February historically is a bad month for stocks. But it doesn’t have to be for your portfolio.

Sometimes the best trade isn’t the flashiest one. Sometimes it’s the boring healthcare stock that gaps down, creates a mathematical setup, and gives you a clean way to profit.

I talked a lot about gift gaps with our trading analyst Chris Johnson in our latest MTA Live video: you can check it out here.

Abbott Labs. Write it down.