Biotech Stocks: Amgen Rallies to New Highs

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  • 9 Months ago
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The biotech industry is one of the most closely watched sectors in the stock market, and the first quarter of 2017 has been no exception to this rule.  All of the media discussion about President Trump’s repeal and replacement of Obamacare led many to believe the healthcare sector would see a major sell-off.  But when we look at some of the best biotech companies, we can see that there are still opportunities to be found in the underlying strength of the fundamentals.

One of the best stock examples here can be found in Amgen, Inc. (NASDAQ: AMGN), which can be traded individually, as part of an exchange traded fund, or through indices trading in assets that are tied to the value of the NASDAQ.  

For many, this is the preferred way of investing given the fact that exchange traded funds offer a broader level of diversity when compared to individual biotech stocks. AMGN trades as part of the NASDAQ Composite Index, which is one of the most closely-watched stock market trading instruments in the world of finance and technology.

Biotech Stock Chart: AMGEN, INC. (NASDAQ: AMGN)

In this biotech stock price chart, it is clear that AMGN stock has moved to new highs after surpassing the previous resistance from October 2016.  This is now being viewed as a significant price break given the fact that stock prices fell so drastically after hitting this level previously.  The reversal has been impressive and it is clear that the market is now making a statement in relation to AMGN stock prices.

But while the stock trends have been impressive, this does not mean that it is a good idea to start buying this stock at current levels. It makes much more sense for biotech investors to wait until the technical indicators have some time to unwind.  Once this occurs, it will provide a better entry for long trades.  Essentially, this means a retest of the previous resistance level near 175 as this is a price zone that should now act as support going forward.

Biotech Stocks Outlook

Here, biotech investors should be looking at whether or not AMGEN should be viewed as a precursor for a larger bullish movement in the biotech sector.  One of the best ways to monitor these trends is through the iShares NASDAQ Biotechnology Index ETF (NASDAQ:IBB).  This ETF cuts a broad swath through the biotech industry as a whole, so it is a good gauge of what is happening in biotech stocks trading in the NASDAQ.

In the IBB stock, we will still need to see stronger moves to the topside in order to get bullish in our positioning.  At this stage, we are basically looking for stock trends to retrace enough to get a better price on the stocks that have been rallying.  But in any case, it has become clear that the initial policies suggested by the Donald Trump administration have not yet had the expected effect.  Biotech stock prices have been relatively buoyant in the event that Obamacare has now fundamentally changed the healthcare system in the United States.

 

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