Mad Money viewers Friday night got a long recommendation from Jim Cramer. Cramer said to look no further than drug maker Amgen Inc. (AMGN) which has many ways to win. Cramer said that Amgen is a well-run company with a solid balance sheet that includes $42 billion in cash. The company is truly in control of its destiny, as we've seen this year with its incredible buyback program that retired 7% of the shares outstanding in just a matter of days. Amgen's migraine drug, Aimovig, is off to a strong start. He was also a fan of the Repatha, the company's cholesterol treatment drug that is taking share and offering a solid alternative for patients that cannot take the traditional medications. The fundamentals sound strong so let's also check the charts and indicators.
In this daily bar chart of AMGN, below, we can see an uptrend interrupted by some corrections, but we need to look closer. Prices corrected from February to early May and during October. Now look at the movement of the daily On-Balance-Volume (OBV) line - only a shallow decline in March and a less shallow decline October. The lack of aggressive selling when AMGN has pulled back tells me there must be underlying support for this name and investors prefer to hold rather than sell. Recently the daily Moving Average Convergence Divergence (MACD) oscillator turned up for a cover shorts buy signal.
In this weekly bar chart of AMGN, below, we can see a bullish rising channel from early 2017. Prices are above the flat 40-week moving average line and the weekly OBV line is strong and pointed up. The weekly MACD oscillator crossed to a take profits sell signal but it is still nicely above the zero line.
In this Point and Figure chart of AMGN, below, we can see an upside price target of $221 being projected. A trade up tat $199.42 will be a small double top breakout.
Bottom line strategy: AMGN is showing independent strength and that is a bullish clue when the broad "tape" is weak. Investors should continue to hold.