4 Trade Ideas for Amgen: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Amgen, $AMGN, comes into the week following a strong reversal day Friday. This is happening below the 200 day SMA, a place it had not been since March before last week’s drop. The RSI is also rebounding off a touch at oversold with the MACD negative and moving lower.

There is support at 229.50 and 226.50 then 223.25 and 219.75. Resistance higher sits at 232 and 235.50 then 238.25 and 241 before 243. Short interest is moderate at 3.1%. The stock pays a dividend with an annual yield of 3.36% and has traded ex-dividend since August 17th. The company is expected to report earnings next on Halloween.

Biggest open interest for both the September 23 and September 30 Expiries is in the 225 Put strike. The October monthly chain has biggest open interest at the 245 Call and then the 245 and 220 Put. In the November chain the biggest open interest is at the 260 Call with a smattering in comparison from 250 to 210 on the Put side.

Amgen, Ticker: $AMGN

Trade Idea 1: Buy the stock on a move over 232 with a stop at 226.50.

Trade Idea 2: Buy the stock on a move over 232 and add an October 225/220 Put Spread ($1.70) while selling the October 245 Calls ($1.70).

Trade Idea 3: Buy the September 30 Expiry/October 240 Call Calendar ($2.45) while selling the September 30 Expiry 225 Put ($1.70).

Trade Idea 4: Buy the October 220/235/245 Call Spread Risk Reversal (85 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the week of the September FOMC meeting, saw equity markets had pulled the rug out from under traders, giving up the nascent reversal off the early September low and driving to new 2 month lows.

Elsewhere look for Gold to continue its pullback while Crude Oil continues to the downside as well. The US Dollar Index continues to trend to the upside while US Treasuries continue their downtrend. The Shanghai Composite looks to continue the short term move lower while Emerging Markets continue their downtrend.

The Volatility Index is slightly elevated and threatening to move higher, making the path easier for equity markets to the downside. Their charts look weak, especially on the longer timeframe following bearish engulfing weekly candles. On the shorter timeframe the IWM, the QQQ and the SPY all printed hammer candles for a possible reversal, but at a lower low and the lowest level in two months, negating the hope of a reversal.

Clearly Wednesday’s FOMC meeting will play a big role in whether markets continue towards a retest of the June lows or hang on and reverse higher. All 3 Index ETF charts are trading in lockstep. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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