AMGN has been trading in a nice range since the end of last year on daily charts. However, the 20 day and 50 day SMA are begging to approach the 200 MA. If it can hold look for it to retest resistance at 173 range. If it breaks below that trendline and we get a Moving average cross, it could lose momentum and break through second support line in 152 range. From there, no more real support until 127 and would make excellent short opportunity.
RSI has been coiling as its stayed in this trading range so could see a pop off the trendline but overall MA show weakening of price in what is usually a volatile Biotech market.
Obviously this is Biotech and AMGN has two new drugs coming onto the high cholesterol scene to compete with big boys REGN. Non-effective marketing or final drug study tests could lead to disappointing sales numbers. Wont be reflected on earnings coming up so we wouldn't see an immediate drop yet. Could take til 3Q earnings to start to see results.
If it holds the trendline I would wait to see a retest of highs before going long. If it breaks lower trendline, then Jan 15 2016 puts at $115 are attractive at their current price of 1.68 which would give plenty of time for this to develop more as a way OTM play with a lot of time for lack luster initial sales numbers to present themselves and push the price down farther.
I will be looking in the coming days to make a short position depending on trendline hold or not with an exit time frame of around October hence the OTM puts in Jan. Will put stop loss at 60% of investment and adjust as closer to expiration.
Comentários
clifkix5
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Held the 1st indicator trendline so still not ready to short. Look for break out at 164.70. Movement north of that could signal big gains
clifkix5
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Updated with correct drug trials LOL. Too much biotech going on in my head. I'm still on the fence about if I should go long or short. next week should be telling if I should open up my short position. I would be a buyer of stock at 130 with drug line-up coming down the pipeline. But until those sales numbers actually hit from new drugs Repatha, and the fact that it didn't receive any earnings bump from most recent report after big BEAT makes me thing that this might continue to weaken until Repatha hits the market fully and needs to become a big major revenue generator