Amgen Reported Earnings – Now What?

• Posted by Greg Harmon
• on January 26th, 2012

Amgen, $AMGN, reported earnings after the close Thursday missing on earnings by a penny per share, beating on revenues and guiding higher. All right! Wait, is that good news or bad news for the stock? The high priced Wall Street analysts will tell you what they think about the fundamentals, based on their own firms positions and relationships. But from a deep dive into the truth, the price action, the story looks good.

Amgen, $AMGN, Daily

The daily chart above shows that it went into the earnings report building a bull flag between 67.40 and 69.60. After the report, in after hours trading, it is still in that flag. It does have some signs of rolling lower on this time frame with a Relative Strength Index (RSI) that is bullish but falling and a Moving Average Convergence Divergence (MACD) indicator that has crossed negative. But still in the flag. Support lower is found at 65 and 63.60 followed by 60.90 and 58.80. A break of the flag higher though has a Measured Move to higher to 74. The weekly chart also

Amgen, $AMGN, Weekly

shows some signs of needing a rest. The RSI on this time frame is also falling back but still very bullish and the MACD is starting to fade. More interesting is that price is about 20% above the Simple Moving Averages (SMA). Extended. This can resolve with the SMA’s launching higher as well as a pullback in the stock. If it does pullback there is support at 60. It is when you step back to the monthly chart that a very bullish picture emerges. On this time frame it is breaking out of a symmetrical triangle at 60, with a target out of the pattern to 84. And it gets better. The RSI has only recently turned bullish and is rising, while the MACD is growing more positive with

Amgen, $AMGN, Monthly

the Bollinger bands expanding to allow for more upside. If you can look at this as an investment instead of a trade it seems to have over 20% upside left in it. And it pays you a 2% dividend to wait. Your money, your choice.

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