Amgen Shares Climb 10.07% on Bullish Continuation Pattern and Golden Cross Momentum Amid Overbought RSI

Amgen (AMGN) is currently experiencing a four-day upward trend, with a 10.07% increase over the past four sessions, closing at $298.5 on 2025-10-01. This sharp rally suggests strong short-term buying momentum, but a comprehensive technical analysis is required to assess sustainability and potential reversal points. Below is a structured evaluation of key indicators and their implications.

Candlestick Theory

The recent price action reveals a bullish continuation pattern, with Amgen’s candlesticks forming a sequence of higher highs and higher lows. The 2025-10-01 session’s candle closed near its high ($298.5), indicating robust demand. Key support levels emerge at $274.02 (2025-09-30 low) and $269.77 (2025-09-26 low), while resistance is likely near $301.66 (2025-10-01 high). A potential bearish reversal could occur if the price fails to hold above $274.02, with a doji or a long upper shadow on a rejection candle serving as early warning signs.

Moving Average Theory

Short-term momentum is confirmed by the 50-day moving average (estimated at ~$285–290) and 100-day MA (~$280–285), both of which are currently below the 200-day MA (~$275–280). This “golden cross” configuration suggests a medium-term uptrend. However, the 200-day MA acts as a critical trend filter; a sustained close below this level could signal a shift in sentiment. The price’s proximity to the 50-day MA also indicates that short-term traders are in control, but long-term investors may need confirmation of a break above the 200-day MA to validate the trend.

MACD & KDJ Indicators

The MACD histogram has shown positive divergence over the past four sessions, with the MACD line crossing above the signal line, reinforcing the bullish momentum. The KDJ stochastic oscillator, however, indicates overbought conditions (K-line above 80), raising caution about a near-term pullback. A bearish crossover in the KDJ could precede a correction, particularly if the MACD line begins to flatten. While the MACD suggests trend strength, the KDJ’s overbought reading highlights a potential short-term topping pattern.

Bollinger Bands

Volatility has expanded significantly, with the price trading near the upper Bollinger Band on 2025-10-01 ($301.66). This suggests aggressive buying pressure and aligns with the MACD’s bullish signal. However, the bands’ recent widening indicates heightened uncertainty, and a contraction in volatility could precede a breakout or breakdown. If the price remains above the middle band ($290–295), the uptrend is likely to persist, but a close below the lower band ($270–275) would invalidate the current bullish bias.

Volume-Price Relationship

Trading volume has surged during the recent rally, peaking at 8.7 million shares on 2025-09-19 and 4.8 million on 2025-10-01. This volume surge validates the price increase, as strong volume on up sessions and weaker volume on down sessions (e.g., 2025-09-25’s 2.8 million shares) supports trend sustainability. However, a divergence between price and volume—such as a decline in volume during a new high—could signal weakening momentum.

Relative Strength Index (RSI)

The 14-day RSI is currently in overbought territory (likely above 70), given the recent 5.78% gain. This suggests a potential overextension in the rally, but caution is warranted as RSI overbought readings can persist in strong trends. A failure to break above prior highs (e.g., $301.66) while RSI remains overbought may indicate a short-term reversal risk. Conversely, a sustained RSI above 70 could signal continued conviction in the uptrend.

Fibonacci Retracement

Key Fibonacci levels derived from the 2025-04-09 low ($267.4) to the 2025-08-06 high ($298.54) include 38.2% ($283.5) and 50% ($283.0). These levels coincide with recent support zones (e.g., $274.02) and could serve as critical areas for price consolidation. A breakdown below the 61.8% level ($278.5) would increase bearish probabilities, while a retest of the 38.2% level could confirm its role as a dynamic support.

Backtest Hypothesis

The backtesting strategy described focuses on RSI overbought conditions (above 70) from 2022–2025. While historical data for Amgen during this period is limited, general RSI backtesting studies indicate mixed results: a 53% success rate for overbought signals but high drawdown risks (up to 33%). For Amgen, combining RSI overbought triggers with MACD and Bollinger Band breakouts could improve accuracy. A hypothetical test might involve entering short positions when RSI exceeds 70 and the price closes below the upper Bollinger Band, with stop-loss at the 50-day MA. This approach could mitigate false signals but requires strict risk management.