Background und Analysis
Amgen is an US-American biopharmaceutical company headquartered in California. Amgen has 18000 employees and is the world’s largest independent biotechnology firm. The stock is listed on the NASDAQ.
In Figure 1 we can see that the stock has risen from $50.00 in 2011 to around $180.00. Amgen established a clear uptrend, which gained strength in the end of 2014. In 2015 AMGN developed a sideways range between $150.00 and $170.00 which is highlighted as a black rectangle in Figure 1. AMGN left this zone and formed a correction after breaking the SMA 100 and the trend line 1 downwards. If the stock also breaks through the $140.00 it should fall even faster. For mid-term traders there is a local downtrend on the daily chart at the moment which might correct until $155.00.
On the daily chart (Figure 2) the strong downward trend is clearly visible (blue lines), which has left the sideways range (black rectangle). The strength is recognizable by the fast downward-moves since the all-time high, while the corrections take several days. The volume in the actual correction is unsteady.
At the moment the stock has formed a 90% correction with low volume at the moment and is near the SMA 100 and the SMA 200 which should form a strong resistance zone. For a defensive, mid-term short trade we could wait for a subordinate trend for an entry. A more aggressive option would be to trade the blue daily trend.
If the down-trend accelerates, there are lucrative targets at $132.50, $127.50 and $115.00. If AMGN breaks through $158.00 our short-trading idea is over. Before any trade it is always necessary to look for news e.g. company earnings.
Targets: $132.50 , $127.50 and $115.00
Time horizon: medium-term