Biotechnology has quietly moved up the industry rankings in the last month. We recently highlighted the long-term breakout in the iShares Nasdaq Biotechnology ETF and now its biggest holding (8% of assets) has some interesting patterns: Amgen.
AMGN broke out to new highs in late 2019 and crashed along with the rest of the market in March. It then proceeded to make a higher low in June as it found support at its 200-day simple moving average (SMA). This produced a cup-and-handle chart pattern.
The stock had a tight bullish flag above its 50-day SMA in late June, and then ripped to new highs after winning a patent case against Novartis.
AMGN pulled back last week. It formed a hammer candlestick on Friday and is now bouncing at its 8-day exponential moving average (EMA). That line can serve as a potential risk-management area.
There are two reasons why it may not dip a lot more. First, AMGN hasn’t run much yet versus its December highs. So, there may not be many profit-takers yet. Second, the relative strength in IBB following its recent breakout could provide tailwinds.
AMGN reports earnings after the closing bell on July 28.
AMGN broke out to new highs in late 2019 and crashed along with the rest of the market in March. It then proceeded to make a higher low in June as it found support at its 200-day simple moving average (SMA). This produced a cup-and-handle chart pattern.
The stock had a tight bullish flag above its 50-day SMA in late June, and then ripped to new highs after winning a patent case against Novartis.
AMGN pulled back last week. It formed a hammer candlestick on Friday and is now bouncing at its 8-day exponential moving average (EMA). That line can serve as a potential risk-management area.
There are two reasons why it may not dip a lot more. First, AMGN hasn’t run much yet versus its December highs. So, there may not be many profit-takers yet. Second, the relative strength in IBB following its recent breakout could provide tailwinds.
AMGN reports earnings after the closing bell on July 28.
