Wednesday, June 17, 2009

Sector Rotation - Long Biotechs - Amgen, Inc. (Public, NASDAQ:AMGN) ; Celgene Corporation (Public, NASDAQ:CELG)

Sector rotation as the markets correct, biotechs a defensive sector is starting to gain momentum.

Last night we said we wanted to swing AMGN on a BO of the base at $52.00. This morning it popped on the open out of yesterday's C&H pattern. It paused at $52.00 and carved out NRIBs on 5 minute timeframe before extending the full measured move (100%) of C&H pattern. I locked in half and holding the balance with a stop at $51.00.

Next level of resistance on daily is 200 SMA, followed by $56.00.

On the CELG daily chart above, I was looking for an ambush setup after the late May - early June thrust. CELG retraced 50%, printed some NRBs, so I was able to see an entry at the base from the blue line segment.

As you can see from the 5 minute timeframe below, the CELG trade is much wider than AMGN. It was about 30 cents shy of retesting the upper fib. line, so I expect it needs to consolidate a bit before breaking out to the next level.

N.B. - The POT trade we talked about last night was foiled when Germany's largest potash producer reported disappointing earnings and guided lower for the year. The whole Agchem sector went into a black hole on the open and POT barely got a bounce at key support - $97.50 -$97.00.


Anonymous said...


Nice call on AMGN. This has been a good week so far. I'm expecting the chop is coming tomorrow.

TJ said...


Yeah, a good week since we finally broke the narrow range on the S&P. Looking at some ambush setups on the daily timeframe. SNDA looks promising on a break of $55.00