Amgen Inc. discovers, develops, manufactures, and delivers human therapeutics worldwide. It offers products for the treatment of illness in the areas of oncology/hematology, cardiovascular, inflammation, bone health, nephrology, and neuroscience.
Take a look at the 1-year chart of Amgen (NASDAQ: AMGN) below with the added notations:
After hitting its low in November, AMGN rallied to new highs within 4 months, and has now given back about half of those gains. Along the way, the stock created a key price level at $160 (green) that has provided both support and resistance for AMGN. Now that the stock has fallen back down to that level again, traders could expect some sort of a bounce.
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The Tale of the Tape: AMGN has a key level at $160. Traders could enter a long position on a test of $160, with a stop placed below that level. Traders that are bearish on the stock could enter a short position on a break below that level instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach