Is Amgen Stock Coiling Up?

by Darius Anucauskas
12:05, 2021/08/04

Looking at the technical picture of the Amgen Inc stock (NASDAQ: AMGN) on our daily chart, we can see that the share price is currently stuck between two medium-term trendlines, an upside one taken from the low of April 29^th, and a downside one drawn from the high of April 21^st. This way, the stock seems to be forming a symmetrical triangle pattern, which could maintain the price action within its boundaries for a while. In order to consider the next short-term directional move, we would prefer to wait for a violation of one of those trendlines first. Hence our neutral approach for now.

If, eventually, AMGN breaks the aforementioned downside line and pushes through the 250.33 barrier, marked by the highest point of July, that could attract a few more buyers into the arena, as such a move would confirm a forthcoming higher high. The share price might then get lifted to the 254.66 zone, marked by the high of May 17^th, which may provide a temporary hold-up. However, if there are still enough of new buyers, the stock could travel further north, potentially targeting the 258.83 area, or the 260.96 level, marked by the highest points of May and April respectively.

The RSI is currently sitting fractionally above 50 and points strongly to the upside. The indicator started showing positive price momentum, which supports the scenario to the upside. However, the MACD is marginally below zero and its trigger line, while pointing slightly to the downside. Given that the two oscillators are out of sync, the overall picture is inline with the idea of standing pat for now.

Alternatively, if the break of the previously discussed upside line happens and the share price falls below the 238.26 hurdle, marked by the current lowest point of August, that may spook buyers from the field and the stock could drift lower. AMGN might travel to the 233.00 zone, marked by the lowest point of June, where a temporary hold-up may happen. However, if there are still no new buyers near that zone, we might see a further slide, possibly aiming for the lowest point of April, at 231.10, or for the 228.69 level. That level marks the low of March 11^th.

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