Hello, everyone. It’s Stephen Whiteside here from theuptrend.com. And in this presentation, we’re going to take a look at the recent trading action in Amgen (AMGN. Now, if you were watching the market on Friday morning, it was all about Apple (AAPL), but apparently not. Amgen hit a triple play on Friday. It was the top performing stock in the Dow, the Nasdaq 100, and the S&P 500. That doesn’t happen very often. Now, looking at the daily Panic Zone chart for Amgen, you can see we popped big time on Friday. Looking at the Panic Zone chart, we’re looking for low risk buying opportunities. When a stock is down at the bottom of the Panic Zones and a Pressure Zone has formed, that’s when low risk buying opportunities show up. Now, they don’t always work out. This rally here turned out to not last very long before it started to roll back, and we actually ended up making a lower high here and then a lower low here. So Amgen was still looking pretty bearish before the last buy signal showed up. Now, at the top of the chart, we’ve got our early warning signals. And again, they don’t always work out.
The one over here on the left certainly did. These two didn’t. And of course, these two have worked out. Now, anytime that an early warning signal shows up, two things are going to happen. Well, first of all, if you’ve been hitting your Price Targets and selling along the way up, you’ve only got a few shares left. That’s what often happens. So there isn’t that much pressure to get out. So you can wait for the actual sell signal. This trade didn’t last very long, so unfortunately that one didn’t work out. But what happens is that when you are up at the top of the Panic Zones and an early warning signal goes off, the first thing you want to do is to play defensively and just take your finger off and sit back and wait till to see things develop. But you certainly don’t want to be buying up at those levels after an early warning signal goes off. That can often end in disaster. Now, looking at the daily Right Side chart from back on April 22, that’s when this trade started. It was the first close above the upper chain line. So if you shorted Amgen back here, then we’ve got a buy signal.
So now we’re going to be looking to buy at the open on the next day. So that would have been April 23. Now, at the time it was looking bearish. We were struggling along the bottom of the flypaper channel. So we’re up at the Fly Paper channel. This isn’t the big area of resistance that it would be if we were trading much farther below. So we’re struggling here. We weren’t expecting to be able to shoot through the way we did, but our expectation at the time would have been a run up to at least the recent high. But you can see that we’re coming off an oversold position and moving up. We haven’t gone all the way up to overbought yet, so there’s still some room to run. But at this point, it’s still looking pretty bearish for Amgen back on April 23. Now, at the time, we were trading around support at the 265.63 level, so that was bullish. We traded along there for a couple of weeks. You notice that we traded below that level but never broke away from it. Now, what’s happening now? Well, on the 22nd and the 23rd, we started to break away from that level, so that’s looking a lot more bullish.
Of course, our next mathematical target is 281.25, but we already know that we were able to trade above that just a month ago. So you got a couple of bullish things here, and the sky is looking much brighter back on April 23 than it did the previous week. Now, on the 23rd, we opened at 272.14. So if you had your order in to buy at the open, that’s the price you would have got filled at. Now, I always strongly recommend that you check premarket activity anytime you get a new buy or sell signal. And the first thing I’d look for is if, you know, I got a buy signal in Amgen, and I came in the next morning and I found it was trading below the previous day’s low in the pre market. Well, I’d just avoid that buy signal and not do anything. There’s nothing wrong with waiting an additional day to get a confirmation signal, which would be the next close above the upper channel line. It’s really up to you to decide whether to take that signal or not. And if there’s a lot of negative premarket activity, you want to avoid it.
And at the same time, if the market is selling off sharply in the premarket, you probably want to avoid that buy signal and wait another day. That’s also true for sell signals. If you get a sell signal, you come in the next morning and you find the stock has shot up in. In the premarket, you’re going to just wave off that sell signal. A lot of times, signals are generated because there was noise in the market the previous day. So let’s say on Friday, there was a lot of bullish noise about a stock. And then over the weekend, everybody figured out that, hey, those rumors aren’t really true. The company’s really not going to do that, or the government’s not going to sue them, whatever. And then on the Monday, all that energy is taken out of the stock. You really want to check what’s going on in the premarket before you actually place that order. So, coming in, we see that stock’s bidding up a bit in the premarket, so it’s good to take it. There’s nothing wrong with paying a little more today than you did yesterday, because that’s what you want the market to do.
It can’t go up unless people are willing to pay more for a stock. So jumping in at 272.14 is what you did. Now, back on that day, here’s what our Price Target chart looked like. And I’m always talking about your immediate playing field is two lines up or two lines down, depending on which way the stock is going. And so when we go back in time to April 23, we were looking two lines up. Now, if we go back and look to the left of the screen, you can see we had a move up two lines and drove right up, stopped on the dime. And then the next day, we started to break out above it. So that opens up the next two lines to the upside, and that took us up to the 320 813 level, where we stopped. We actually traded through that level and then came down fairly quickly. Now, you’ve probably heard people talk about the fact that stocks usually rise on an escalator and fall on an elevator, and that certainly looks like what happened here. But we drove two lines down, tried to find support. Once support broke, then that opened up the next two lines, and it took over a month to get down to the $265.63 level.
And then we traded along that for a couple of weeks. So we were building a base that could turn out to be bullish. Now, when we look up two lines, what I always recommend is you take whatever position you purchased. So you put an order in for 10 shares, 100, 1000 shares, whatever amount you bought, you get a confirmation of a fill from your brokerage firm. So now you know that those shares are in your account. You automatically go back into your account and put a good to counter canceled order in up at the next price level. And you want to sell at least 50% of your initial position. So if you bought 100 shares. You want to sell 50 at 296.88, and I recommend that you put that order in a little below that. So what about 295.88, for example? Because you know that there’s going to be selling pressure usually up at that level, and so you want to just put it in a little below. There’s no reason to be greedy and put it in right at $296.88. Once you know that you’ve got that order in place, then go back into your account and put another order in to sell a remainder, 50% of your remainder of a position up at the 312 50 level.
Again. Make it 311 50. Put it in a little below. Now, you’ve got 75% of your position. You’ve got orders in to sell those shares as the stock goes up, whether you’re there or not. You don’t have to watch the market at this point. Now, whatever remaining shares you’ve got left, you can put an order in to sell half of those at 328.13, and you’re going to put them in again. It’s good to cancel the order. You can cancel it at any time. But what we’re doing is getting prepared for the market to move up, and sometimes the market moves up really quickly and you’re not there. You’re not sitting at your machine at that time to take advantage of it. So you want these orders in before it ever happens. So what did happen? Well, we popped on Friday, and that was quite a dramatic move to the upside, we gapped higher. Where did we land? Well, at the end of the day, just below the 312.50 level. Now, if you had to put your orders in ahead of time, you would have got filled at the open. So those orders in the 50% that you had an order in at 296.88 or around that level, that got filled at 313.39 or approximately that level, it would have been executed at the open.
So would your order at the 312.50 level. That would have also been executed at the open. So, you know, the fact that you weren’t there, you were going about your day, those orders got filled. Now, we didn’t make it up to the 328.13 level. That’s kind of a coin flip from here. But we were up at that level back a couple of months ago, and so it is certainly doable. Whether the market wants to continue higher from here or starts to pull back to fill that gap, we don’t know yet. But at least you’ve got an order in up at that level. Now, coming into Monday’s trading action to get kicked out of the remainder of your shares in Amgen, we would need a close below $272.61. And you know what? I kind of think that’s not going to happen on Monday. So our expectations would be that, over time, you can see that lower chain line is starting to curl up. So, over the next couple of weeks, we’re going to run up towards where Amgen is trading right now. Now, if amgen starts to come back sharply, they’re going to meet faster.
But if amgen hangs around this level or continues to move higher, our lower chain line is going to trail the stock higher. But certainly on Monday, we would need a close blow, 272.61, to get kicked out of amgen. Okay, that’s all I wanted to cover in today’s presentation. Thank you very much for your time. You know, if you ever imagined being a superhero when you’re a kid, and that hasn’t worked out for you so far, like, if you haven’t rescued a dog from a burning building or saved somebody from drowning, you know, there’s a way you can become a superhero with not much effort. About an hour of your time, and that is to donate blood. Now, I’m a big supporter of people who donate blood, and I put my money where my mouth is. And we have a lot of people who have free lifetime memberships to the uptrend because they’ve been lifetime blood donors. When you start donating blood, you can get a discount on our services. So, you know, if you’re interested in becoming a subscriber and you’re a blood donor, please go check out this page on our website. Otherwise, you know, if you’re going to donate blood this week, you’re probably not going to know anybody that’s going to help.
You’re going to be helping complete strangers, you know, mothers giving birth in distress, people in car accidents. At some point in your life, somebody you know, a family member, a friend, is going to need blood. And you’re going to feel pretty good about the fact that you’ve been a long time blood donor. So, please, especially men out there, if you’ve got cardiovascular issues, there’s some evidence out there that this can be very helpful for your long term health if you become a long term blood donor. Okay, folks, thank you very much for your time and attention, and we’ll talk to you again soon.
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Stephen Whiteside
TheUpTrend.com
Saturday, May 4, 2024
