After a strong 3 month move from February to May that delivered a pop through its long term upper wedgeline, Amgen Inc. (AMGN) has been pretty weak, failing to follow through on its breakout. Now it’s do or die time, as the charts indicate a slight backtest violation of that very upper wedgeline it broke out of (see Two Tech Stocks for the Taking). Fortunately, the stock is nearing a confluence of technical supports, which may allow for a bounce and some breathing room short term.
Looking at the daily chart, Amgen is oversold, and filling a gap left on April 26th at 54.69. Additionally, the stock appears to be fulfilling an ABC measured move that finds support near 54. Any bounce should find resistance at the short term downtrend line (around 57.50 and declining). The daily chart with TD Demark count indicates that we are on bar 8 of a perfected TD 9 buy set up which will record today and should produce a positive 1-4 day reaction.
Lastly, the ishares Nasdaq Biotechnology ETF (IBB) is near 52 week highs. The fund has struggled to break the 110 area, which makes the trend line all the more important. Currently at 105, this trendline will be important to watch as Amgen tries to make a move.
Previously published as a blog by Minyanville.
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Author had a position in AMGN at the time of publication.
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of his employer or any other person or entity.