Amgen (AMGN) — This biotechnology company has been a leader in the development of genetically based research and treatment for cancer, anemia, rheumatoid arthritis and a host of other major illnesses. It markets five of the world’s best-selling biotech drugs.
On Oct. 7, I said, “Since the last Trade of the Day recommendation on July 1, with the stock near $100, S&P has increased its guidance for the company. For 2013, it raised earnings per share (EPS) estimates by 6 cents to $7.30, but reduced its 2014 estimate by 46 cents to $7.75 due to acquisition charges related to the purchase of Onyx Pharmaceuticals. Its 12-month target is $128.”
On Oct. 22, Amgen reported that Q3 earnings rose 24%, well above estimates, and the company’s management raised its 2013 earnings estimate 5 cents to $7.35 to $7.45. Analysts’ consensus estimate for 2014 is $8.13.
AMGN formed an inverse head-and-shoulders formation (bullish) with a trading target of $130. After a false breakout above $115, the stock retreated to $106 and then quickly rallied above $115. The rally produced a MACD buy signal and formed a bullish “V.” Buy AMGN at the market with a revised trading target of $130 to $135.