Amgen Inc Up to Earnings
Jul
22
Written by:
7/22/2008 10:54 PM
Amgen Inc Up to
Earnings
Amgen Inc (AMGN) is looking very attractive heading into
earnings with the additional good news of Nplate being approved by the Food and
Drug Administration on Wednesday or Thursday.
Strong Volume
Amgen Inc
has been on a nice run since it broke out of a range on June 24th,
moving from 45 to 55 in a month’s time. Over the past 10 days, Amgen’s daily
volume has increased to an average of 12 million shares a day compared to a three
month average volume of only 9 million shares a day. This additional 3 million
shares a day in volume is a bullish sign coinciding with the increased price.
Options
The front
month options for Amgen were also bullish today as investors were active in the
57.50 August Calls. With the stock price currently at $54.60, Calls at strike
prices of 55 and 57.50 having strong demand demonstrates investor’s bullish
bias in the near term for the stock.
NPlate
NPlate is a
drug developed by Amgen to treat blood-clotting disorders that is set to
receive FDA approval this week. 200,000 people in the United States
are affected by the disease that NPlate treats. An outside panel recently
recommended approving the drug and the FDA is expected to follow the panel’s suggestion
and clear the drug for use. Not a huge market for a drug but the stock is still
demonstrating strength going into the announcement.
Earnings
In addition
to the NPlate approval, Amgen also announces their quarterly results on the 28th
on July. Not only is Amgen on deck for an earnings release but the rest of the
week is full on drug and biotechnology stocks reporting. As other companies
report outstanding results as Biogen Idec did today, Amgen stock should
continue to rally.
The Trade
Buying
Amgen ahead of the NPlate approval and their earnings is appropriate. Waiting
for a dip in the morning and avoiding buying after a bounce of over 3% during
the day are good guidelines. Place a stop 7.5% below its current price to limit
your risk in case of a down turn. Sell your position during the day on Monday
the 28th prior to earnings as a negative surprise after the close
could lead to a gap down in the morning following.