Zooming In on Amgen's Charts

 | Jun 27, 2014 | 9:00 AM EDT  | Comments
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amgn

I'm pretty sure I've shown you the bigger-picture analysis in Amgen (AMGN) on the weekly chart. This is where the path of least resistance on this particular chart would suggest an eventual move to the 1.272 target at the $134.61 area if price continues to hold above the late April 2014 lows. (The actual low was made on April 28, though the weekly charts note that that is the week ending May 2, which is the date illustrated on the weekly chart.) 

I'm not willing to risk below this key low, however, to see if I'm right! So how can you manage the trade if you are in it? Or how can you get involved with well-defined risk if you are not already in this name?

Let's look at the lower-time-frame work for those answers. You can see that we are up against some resistance here on the weekly chart, but the other answers are going to come from the daily charts that I've prepared for you.

A recap of the setup on the weekly chart came from the fact that the last major decline illustrated on the chart lasted six weeks and was $20.80. The decline into the week ending May 2014 low also lasted six weeks and was $20.76, which is a very similar swing in price. This "symmetry" projection also overlapped a .618 retracement of the prior major swing on this same chart. Once we started seeing buy triggers after holding that zone, we knew we could look at the buy side with our risk defined below the late April low.

AMGN Weekly
DynamicTrader

Let's look at the daily chart next. If the bullish pattern since the April 28 low was made is going to continue to play out sooner rather than later, price should hold above the prior swing low made on June 13 at $115.30. Above this prior swing low I have an important price support cluster that comes in at the $116.52-$117.48 area. This includes a .618 and .786 retracement of the prior minor swing along with two 100% projections of prior corrective declines within the uptrend.

So as of now, I am OK being a buyer of this stock as long as this key price support is not violated. My maximum risk will be defined below the $115.30 swing low. My bigger-picture target in this name remains at the $134.61 area. If the June 13 low is taken out instead, I will back off the buy side until further notice.

AMGN Daily
DynamicTrader
AMGN, 78-Minute
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