I’ve been stalking Amgen (AMGN, $104.38, up $0.08) for quite a few weeks here, ever since it tested key weekly support at the 93.40-95.03 area. The actual low was made on June 6 at 94.15.
Well now we are finally seeing some follow through to the upside in this one. The WEEKLY chart tells me that my upside potential is the the $120.61 area (See attached Weekly and Daily chart – 1.272 target). So with that being said, I would like to buy a pullback on the daily chart with that ultimate target in mind. Right now I would be watching anywhere from the 97.10-99.85 area. These levels will be adjusted if a new high is made first. The max risk on any new purchases should be defined below the 6/6 low (~$94.30).
July options have too little time, October too far away, August with 4 1/2 weeks until expiration just right. A pullback below $100 in the next week might have the Aug 97.50 call trading in the ~$4.50 range. Interesting risk/reward if we do indeed travel to ~120.