4 Trade Ideas for Amgen: Bonus Idea

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

Amgen, $AMGN, made a two-step move higher off the pandemic low. That topped out in July and has acted as resistance ever since. The price pulled back to a low in October and then retested the high in January. A blast to the upside could not hold over resistance and it dropped back again, to a higher low. It made another assault on the high in April that also failed and resulted in a gap down last week. The 3 candles to end the week confirmed a Morning Star reversal pattern, at another higher low, and look for upside this week.

The RSI is also reversing higher off a move into bearish territory with the MACD falling and negative. There is resistance at 242 and 247 then 254 and 260. Support lower comes at 234 and 228 then 220. Short interest is low at 1.9%. The stock pays a dividend with an annual yield of 2.94% and begins trading ex-dividend on May 14th. The company is expected to report earnings next on July 26th.

The May options chain shows big open interest at the 220 and 240 put strikes, then at the 260 call. In June, the open interest is focused from 210 to 230 on the put side and spread from 235 to 280 on the call side. In July it is lighter and spread from 205 to 250 on the put side with spikes at 260 and 250 on the call side. Finally, the September option are the first to cover the earnings report. They show an island of open interest from 255 to 260 on both the puts and calls, with some lower at 235 on the put side as well.

Amgen, Ticker: $AMGN

Trade Idea 1: Buy the stock on a move over 242 with a stop at 235.

Trade Idea 2: Buy the stock on a move over 242 and add a June 240/230 Put Spread ($4.40) while selling the September 260 Calls ($5.25).

Trade Idea 3: Buy the May/September 250 Call Calendar ($7.80) and sell the June 230 Puts ($3.75).

Trade Idea 4: Buy the September 220/240/260 Call Spread Risk Reversal (40 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 with April in the books sees equity markets continue to show strength, particularly in the larger caps.

Elsewhere look for Gold to pause in the reversal higher while Crude Oil consolidates in its uptrend. The US Dollar Index continues to trend lower while US Treasuries possibly resume their downtrend. The Shanghai Composite looks to continue the slow drift sideways while Emerging Markets consolidate in their uptrend.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong, especially the SPY and QQQ on the longer timeframe. The IWM remains in consolidation long term. On the shorter timeframe all three index ETFs have moved to a sideways consolidation. 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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