Amgen AMGN Cannot Overcome Confluence Resistance

Jun 22, 2009: 12:35 PM CST

A reader asked me to take a look at Amgen (AMGN) due to an interesting pattern he noticed.  Let’s look at the recent “Rounded Reversal” as well as the failure at the confluence overhead resistance of the 200 day SMA and the 61.8% Fibonacci line.

Amgen (AMGN) Daily:

The reader asked if an “inverse head and shoulders” was forming off the April lows, and I see how one could interpret that.

For me, I would call it a “Rounded Reversal,” complete with multi-swing positive momentum divergence (momentum insights are more important to me than basic price patterns) which was signalled with the doji of late April which was followed by a Bullish Engulfing (powerful) candle two days later – this marked the bottom and provided a low-risk, high probability entry.

Price has risen to the $54 level, however bulls can’t seem to overcome the two levels of confluence resistance at the $54 level: Notice how price ‘tagged’ the falling 200 day SMA to the penny, and then failed to close above the 61.8% Fibonacci Retracement drawn.

Notice also the doji at the confluence resistance level combined with a powerful Bearish Engulfing Candle Pattern – bulls beware.  Volume also spiked to the downside on Friday.

I wanted to use this as an example to highlight these specific patterns and trading opportunities for educational purposes – continue to look more into this chart to see what else you can find.

Please join me as the rebroadcasts my presentation “Idealized Trade Set-ups for the Intraday Trader” on July 1st at noon EST – I’ll be there on a free live chat to answer questions through the presentation.

Corey Rosenbloom, CMT
Afraid to

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