Have you been hearing friends or co-workers talking about seizing the opportunity to buy the dips in the technology sector?
The technology sector has dropped by more than 7% in 1 month.
Is it really a good idea to buy the dip?
Better opportunities could lie in the healthcare sector, based on my observation.
And I’ve identified 1 stock in the healthcare sector which I think we can benefit from a swing trade soon.
Shall we 1st have a quick review on last week’s swing trading opportunity: Packaging Corporation of America (PKG)?
Although the share price of Packaging Corporation of America had dropped and bounced off its support zone at ~$152, there’s no buy entry yet according to The Art of Explosive Profits framework.
Let’s continue to keep it in our watchlist and monitor it for a further week.
Alright! It’s time to analyze this week’s swing trading opportunity together: Amgen (AMGN)!
Performance Of US Stock Market vs Amgen (AMGN)
Do you have a list of criteria for choosing stocks for a swing trade?
Here’s mine for your consideration: Performance of the S&P 500 (also known as the US stock market) vs the stock in question.
You’ll want the stock in question to outperform the S&P 500 because there’s where your potential outsized returns are.
From the comparison chart above, you can see that the shares performance of Amgen was poor when compared to that of the S&P 500 from May 23 till late Jul 23.
Things changed and the shares of Amgen outperformed the S&P 500!
The recent strong uptrend tells me the bulls are back in Amgen, and I should be riding this bullish momentum.
How Explosive Is Amgen (AMGN)?
The very next criteria I have is the explosiveness of the stock’s up moves.
Why?
Think opportunity cost.
Have the shares of Amgen proven to be explosive?
In the past 8.5 months, Amgen’s shares have exploded upwards in price 6 times. Each time, its share price had shot up between 6.2% and 13.7%!
Given that Amgen enjoys a market capitalization of more than $140b, its up moves are certainly impressive!
Looking at the price action of the past few days, I think that its share price is about to drop, presenting us with an excellent swing trading opportunity soon.
Where is its share price likely to pullback to?
Let’s find out in our next step of analysis.
Key Price Levels
At this stage, you’ll want to uncover its key price levels to determine whether it’s time to enter for a swing trade.
To do so, let’s plot out its support and resistance zones.
Can you see a strong resistance area at ~$264?
And a strong support area at ~$253?
With those areas marked out, I think that Amgen’s share price is likely to fall to ~$253, and I’m expecting its price to bounce around that area for a potential entry.
The Strategy You Can Use To Swing Trade Amgen (AMGN)
After comparing the performance of AMGN with the broader US stock market, determining whether AMGN has experienced explosive up moves, and identifying its key price levels, it’s time to talk strategy.
To stay in business, you must know your entry, profit taking, and stop loss levels in every trading strategy. Yes, trading is a business, which means that your strategy must be well thought out.
Using The Art of Explosive Profits (AEP) framework, I’d like to see AMGN pullback and bounce at around $253 before considering an entry for a swing trade.
As the name implies, you’ll be looking to consistently catch an explosive move in a short period of time.
Instead of relying on news and hearsay, the AEP course will teach you how to screen stocks for swing trading like AMGN.
You’ll also learn how to read charts and identify stocks that are about to make a big move.
Finally, you’ll learn how to identify the optimal entry, stop loss, and take profit levels to capitalize on these explosive moves (in a safe manner, of course)!
Can you apply the AEP framework to provide you with a side income while working full time?
Yes, you can!
Come, have a look at the AEP framework and incorporate this explosive trading strategy into your arsenal to capitalize on more swing trading opportunities.
Why Is Swing Trading AMGN Worth It?
Source: amgen.com
Amgen’s shares have been rising while the S&P 500 has been falling. Over the past few weeks, Amgen’s shares have been outperforming the S&P 500.
Its shares have also proven to be explosive in nature, allowing its shareholders to enjoy huge profits in a short period of time.
Presently, I think that a pullback is near. It’d be a good idea to monitor Amgen’s shares in the next few days.
While we wait for the setup, please keep in mind that I’m not a financial advisor, so please treat this as infotainment and conduct your own research.
Lastly, all images are from pexels.com, pixabay.com, sectorspdrs.com, tradingview.com, and unsplash.com.
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