Amgen: Strategic Reversal

Amgen (AMGN) was covered in the last update as having a wedge breakout to the downside. 

Price action then promptly reversed back into the wedge, giving the equity a new lease on life.

At least, that’s the way it looked at the time.

If we pull out to one time frame higher … the weekly, and look at AMGN, the reversal set-up and possible channel(s) are clear.

The terminating, rising wedge is there.  However, we can see several trend-line symmetries.

Taking the solid blue trend-line (right side) and bringing it backward (dashed lines), sometimes referred to as “reverse trend-line”, there’s symmetry in the AMGN set-up.

We may be witnessing the strategic reversal of AMGN which has already developed a massive trading channel.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Amgen (AMGN) Forecast

Now that AMGN is breaking lower, let’s take a look at how far down it could go.

The chart shows the terminating wedge pattern.  Depending on where the wedge entry is measured, slightly different projections will result.

A fairly conservative estimate is shown.

If we do not get some kind of recovery back into the wedge itself, a measured move projects to the 185-area.

A potential downside breakout was highlighted yesterday. The press as typical, appears surprised by the markets opening lower, continuing lower.

Doing what they do (fabricate a ‘reason’), AMGN’s decline seems to be a political problem … even though its been in a topping formation for years with ever slowing upward trend.

No matter, it’s all about healthcare uncertainty.  Tomorrow it may be all about something else. 

Wyckoff said over a century ago, the financial press was essentially useless at best and intentionally deceptive at worst.

A hundred years later, not much has changed.

Wyckoff analysis is one of the best kept secrets on Wall St.  We’ve been using it to spot market opportunities since 2008.  Find out more about Wyckoff analysis here.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Upside Breakout Ready

The chart below has a bullish wedge.

Price action’s at the wedge top.

This is how it looks just before an up-side breakout.  Of course we’re dealing with probabilities and the pattern could morph into something else.

However, at this juncture it looks about to move … higher.

The problem is and you may have already noticed, the chart does not look quite right.  Why is price action at the bottom and volume at the top?

It’s inverted … turned up-side down.

We’re looking at Amgen (AMGN), inverted.

Inverting the chart is an old trading technique that’s used to remove analysis bias in one direction or other. 

If a chart looks like a buy (or sell) no matter which way you turn it, there’s a problem … a significant trader’s bias that blinds one to the potential.

Amgen is the largest component in the biotech (IBB) sector. The coming week, may support or negate the breakout potential.

An expandable version of the chart above is here.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Prepping For The Downside

The more sophisticated market participants work the downside.  That’s where the biggest (and fastest) money is made.

shutterstock_242289160Trading books and specifically Reminisces of a Stock Operator, (first published in 1923) detail how the wealthiest traders in the world prefer downside action.

The markets are now stretched to obscene levels and could go higher, still.

Just this past week, we have interest rates breaking out to the up-side, a-la August, 1987.

Being long anything other than corn or wheat and the occasional down-trodden coal miner,  seems to be a high risk plan (not a recommendation).

Positioning for the downside in the appropriate market, might be a lower risk option than riding the insanity to the top … wherever that is.

Which brings us to inverse biotech fund, BIS.  The daily chart shows the well-heeled know something’s up.

2020-08-30_9-32-52-IBB-Daily-5-bar-lanscape-notesSpeculative volume for potential downside in biotech is increasing.  Last Friday’s volume in BIS was the highest in nearly four years.

BIS was trading higher throughout the entire session until the last few minutes.  It closed slightly lower for the day and thus colored the volume bar red.

That minor BIS downturn (up turn in IBB) can be traced directly to Amgen (AMGN) which is now part of the Dow 30, effective Monday the 31st.

It’s important to note that for the past four months, volume activity in IBB has remained relatively unchanged.  Not so with BIS.

We’re nearing the Labor Day Weekend during the next sessions.  The market will be closed on Monday, September 7th.

Back in the day of 1929, the market made its all time high on September 3rd, the Tuesday after the Labor Day Weekend.

 

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Amgen (AMGN) Breaking Down

Amgen’s the heavy hitter, the leader in the biotech sector.  It’s by far the largest cap equity in the IBB, ETF.

Right now, AMGN is pushing down through support; confirming a down trend that essentially started on July 28th, last week.

shutterstock_793257808At this juncture, AMGN price action’s at the danger point. It can go either way with a confluence of orders; buy, sell, and sell-short.

If the trend-line (chart below) is not broken to the upside, AMGN is moving lower at a whopping -90%, on an annualized basis.

As stated, the firm sponsoring this site is heavily short in this sector; increasing the short position on a near daily basis.

Obviously, this is not a recommendation.  We can’t do that as stated in the disclaimer below and here as well.

The inverse fund BIS, that’s being used to position short as with other inverse ETF funds can blow up (or fail) unexpectedly.  We’re well aware and cognizant of the conditions under which that type of anomaly may occur.

At this point, BIS is ‘well behaved’.  However, BIS may be exited at any time and without notice.

By this time it should be quite evident that we (U.S. citizens) and the rest of the world are smack-dab in the biggest, most dangerous farce in world history.

Anyone with two synapses rubbing together can see there is ‘no scientific evidence of anything’, stated at time stamp 9:22, in this link.

2020-08-06_10-40-48-AMGN-Daily-5-bar-notes

If or when the truth-cork finally pops out of the bottle for all to see, it’s too late.  The emperor has no clothes.  That emperor is biotech.

Recognize in the markets, anything can happen.  It’s possible and likely probable another false narrative will be launched to manipulate the weak.  The current narrative is losing effectiveness.  If so, the next one has to be even more outlandish.

Alien invasion anyone?

Back to biotech.  If AMGN breaks its trend to the upside, the reversal scenario is either negated or modified.

Trend-line break or not, there’s a false narrative at play.  Those not able to see and those not willing to take action, risk being swept away with the tide.

 

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.