AMGN breaks below key technical support level
Amgen Inc. (AMGN) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
AMGN finished Monday at 226.91 losing $2.79 (-1.21%) on low volume, strongly underperforming the Nasdaq 100 (0.45%). Trading $1.65 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AMGN as at Jun 01, 2020):
Monday's trading range has been $4.83 (2.11%), that's below the last trading month's daily average range of $6.46. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AMGN.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, the market closed lower but above the previous day's open today, forming a bearish Harami Candle. The last time this candlestick pattern showed up on April 15th, AMGN actually gained 4.10% on the following trading day.
Prices broke below the key technical support level at 227.59 (now R1), which is likely to act as resistance going forward. After having been unable to move above 230.57 in the prior session, Amgen ran into sellers again around the same price level today, missing to move higher than 230.54.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 230.57 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 222.06 where further sell stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Amgen. Out of 245 times, AMGN closed higher 54.29% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.37% with an average market move of 0.84%.