Don't Ignore This Chart!

Amgen Goes for a Pennant Break

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Amgen (AMGN) is one of these stocks that is leading year-to-date, but lagging over the last three months. Year-to-date, the stock is up around 25% and the S&P 500 SPDR is up around 22%. Over the last three months, the stock is down around 4% and the S&P 500 SPDR is up around 7.5%. It has been a rough quarter for Amgen, but the overall chart looks bullish and the recent correction may be ending. AMGN hit a new high with a big surge in September and then fell all the way back to the August low in November. The stock ultimately held this low and the 50-day EMA remained above the 200-day EMA. Thus, the long-term trend is still up. 


 

Shorter term, the stock surged to 180 with pretty good volume and then formed a pennant. There was another high-volume advance within the pennant and the stock is making a breakout bid now. Pennants are short-term continuation patterns and a breakout would target a move towards the September high. A close below 174 would argue for a re-evaluation. 

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--Arthur Hill CMT

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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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