Amgen's Decline Could Be A Good Thing

The S&P 500 has rallied to new all-time highs over the past week, while the Nasdaq Composite has pulled back a bit.

When the Nasdaq sells off it has become commonplace that biotech stocks sell off as well.

Although the iShares Nasdaq Biotechnology ETF IBB, which can be a great gauge for the overall industry, has been showing multiple signs of weakness as of late, pullbacks on specific biotech stocks could provide nice buying opportunities.

Amgen seems to have started a pullback, and with a little bit more selling, there could be an entry point for investors and traders.

The company: Amgen, Inc.

Ticker Symbol: AMGN

Sector: Healthcare

Industry: Biotechnology

Amgen discovers, develops, manufactures, and delivers human therapeutics worldwide.

Related Link: Regeneron Bounces Higher Off Support

The company focuses for the treatment of illness in the areas of oncology, hematology, inflammation, bone health, nephrology, cardiovascular, and general medicine.

Review the one-year chart of Amgen with the added notations:

Amgen has performed very well over the past year with the stock having climbed from a $107 low to a high of almost $175 last week.

In addition, the stock has been bouncing on top of a common chart formation known as a trendline support over the last three months. The most recent test of the trendline came in the beginning of April.

Now that the stock appears to have started to pull back, another test of the trendline could be coming soon, which would give investors and traders a chance to enter a long position.

However, if Amgen were to break below the trendline, lower prices should follow.

The stock closed Tuesday at $162.49.

No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key.

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