AMGEN INC (NASDAQ:AMGN) Shows Strong Technical Breakout Potential with High Setup Rating

Technical breakout strategies focus on spotting stocks with strong momentum that are moving within a narrow range, presenting a possible entry point before a potential upward move. This method uses two main indicators: the ChartMill Technical Rating, which measures a stock’s trend strength, and the Setup Quality Rating, which checks if the stock is forming a solid base. Stocks with high scores in both areas often provide good trading opportunities.

AMGEN INC (NASDAQ:AMGN) currently matches this breakout setup, with a Technical Rating of 7 and a Setup Rating of 9. The stock’s technical strength is backed by positive trends in both short and long periods, while its consolidation pattern hints at a possible breakout.

Technical Strength: A Strong Base

The Technical Rating of 7 shows AMGN is in a steady uptrend, supported by these factors:

• Upward Trends: Both short- and long-term trends are moving higher, confirming bullish momentum.
• Moving Averages: The stock is above its 20-day (299.99) and 50-day (292.34) moving averages, with both trending upward, indicating continued buying interest.
• Relative Performance: While AMGN has underperformed the broader market over the past year (beating only 46% of stocks), recent price action shows improvement, suggesting a possible momentum shift.

A key benefit of the Technical Rating is its emphasis on trend consistency. Stocks with ratings above 7 often show steady upward movement, lowering the chance of false breakouts. AMGN’s rating reflects this stability, making it a candidate for further gains if the breakout occurs.

Setup Quality: A Tight Range Before Breakout

The Setup Rating of 9 points to a high-probability consolidation pattern, marked by:

• Lower Volatility: The stock has moved between 291.77 and 311.28 over the past month, with recent price action tightening near the middle of this range, a common sign of accumulation before a potential move.
• Support and Resistance: A clear support zone lies between 292.34 and 299.99, offering a logical place for stop-loss orders. Resistance is at 307.46, with a breakout above this level possibly leading to more gains.
• Bullish Volume Signal: Recent volume patterns show a bullish "pocket pivot," where price rose on higher-than-average volume, a sign of institutional buying.

The Setup Rating helps identify stocks where risk is clearly defined. AMGN’s structure allows for a disciplined entry above 307.47 with a stop-loss just below 292.58. This represents a risk of ~4.84%, a reasonable level for traders managing exposure.

Why This Pairing Works

Breakout strategies are most effective when a stock has both strong trends (Technical Rating) and a well-formed base (Setup Rating). AMGN’s combination suggests the stock has maintained upward momentum while forming a range that could lead to another move higher. The pocket pivot signal adds weight to the case for accumulation.

For traders looking for similar setups, the Technical Breakout Setups screen offers a filtered list of stocks meeting these criteria.

Disclaimer: This analysis is not investment advice. Always conduct your own research and consider risk management strategies before trading.