Amgen (AMGN) is the 'Stock of the Day' at Real Money Monday and it is down nearly 4% as the market opens, apparently after announcing a "Phase 1 clinical trial evaluating AMG 510 in patients with previously treated KRAS G12C-mutated solid tumors". The results were presented at the World Conference on Lung Cancer in Barcelona. Investors appear disappointed.
Let's check out the charts to get a sense of where prices could be headed.
In this daily bar chart of AMGN, below, we can use our imaginations on how the chart could look as prices open lower. Dips to the $200 area last month were bought so this zone will be important to watch today. Will buyers return to defend that area again this morning? The indicators had a bullish set-up through Friday with prices above the rising 50-day and 200-day moving average lines.
We can see a bullish golden cross of these two indicators last month and we can also see that the On-Balance-Volume (OBV) line made a new high to confirm the price gains.
Last month the Moving Average Convergence Divergence (MACD) oscillator crossed to the downside for a take profits sell signal.
In this weekly bar chart of AMGN, below, we can see that prices are either poised for an upside breakout or at the top of a longer trading range. Prices are above the rising 40-week moving average line.
The weekly OBV line is bullish as it made a new high for the move up. The weekly MACD oscillator turned bullish last month.
In this Point and Figure chart of AMGN, below, we can see the important parameters to watch. A trade at $211.69 will be a new high for the move up and will refresh the uptrend. A trade down at $197.44 will be a new low and weaken this chart a bit.
Bottom line strategy: A new successful drug can be a source on revenue for years, however a failure has to be evaluated in light of the entire pipeline. Above my pay grade, but AMGN shows good support around $190 despite today's anticipated weakness.