In his "No-Huddle Offense" segment of "Mad Money" Wednesday night, Jim Cramer said big pharma may have gone out of style on Wall Street, but the stocks are simply too cheap to ignore. He favored a number of companies including Amgen Inc. (AMGN) .
Let's check out the charts of this company.
In this daily bar chart of AMGN, below, we can see that prices have been strong since May and they just made a new high. AMGN is above the rising 50-day moving average line and above the rising 200-day line. The 50-day line crossed above the 200-day line in August for what is commonly called a golden cross. This bullish signal has a mixed record, but it can be very successful in a long-trending market.
The On-Balance-Volume (OBV) line has been rising from May and tells us that buyers of AMGN have been more aggressive for months now and this helps support and confirm the recent new high. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero-line earlier this month for an outright buy signal.
In this weekly bar chart of AMGN, below, we can see an uptrend over the past three years. Prices have stalled around $210 last year and again this year in August before finally pushing up through any remaining resistance. AMGN is above the rising 40-week moving average line. The weekly OBV line has been strong and rising since April of 2018 and this is a strong reason to be long AMGN. The MACD oscillator turned bullish in August and still has a bullish alignment.
In this Point and Figure chart of AMGN, below, we can see the upside breakout at $211.69 and the price target of $256 projected.
Bottom line strategy: The charts of AMGN are strong and the indicators say we should buy and/or add to longs. Go long here and risk a close below $205 for now. The $250-$260 area is our price target.