Amgen Shares Surge 3.47% as Bullish Momentum Gains from Moving Averages and RSI Approaching Overbought Levels

Amgen (AMGN) is currently trading at $285.41, up 3.47% for the day and 4.51% over three consecutive sessions. This recent bullish momentum is supported by a 50-day moving average (MA) of $288.50 and a 200-day MA of $285.00, indicating a short-term uptrend aligned with the long-term trend. The 50-day MA crossing above the 200-day MA in late August suggests a potential bullish bias, though the 100-day MA at $286.50 reinforces the near-term strength.

Candlestick Theory

The recent three-day rally has formed a strong white candlestick pattern, with a closing near the high of $286.15, suggesting buying pressure. Key support levels are identified at $275.83 (prior consolidation zone) and $273.09 (early September low), while resistance resides at $287.71 (August 29 high). A potential bearish reversal could occur if the price falls below the 50-day MA, triggering a test of the $275.83 support.

Moving Average Theory

The 50-day MA currently acts as dynamic support, with the 100-day MA ($286.00) and 200-day MA ($285.00) closely aligned. This "triple MA convergence" suggests a robust uptrend. However, the 50-day MA may pivot to resistance if the price corrects, as seen in early September when a pullback to $273.085 coincided with the 200-day MA.

MACD & KDJ Indicators

The MACD histogram has expanded positively, indicating rising bullish momentum, while the signal line remains above zero. The KDJ oscillator shows an overbought condition (K at 85, D at 78), suggesting a potential short-term pullback. Divergence between the KDJ and price action—such as a lower high in K while the price makes a new high—could foreshadow a reversal.

Bollinger Bands

Volatility has increased, with the bands expanding from a narrow range in mid-September. The current price of $285.41 sits near the upper band, signaling overbought conditions. A break above $286.15 could trigger further expansion, but a retest of the lower band ($277.37) would validate the trend’s resilience.

Volume-Price Relationship

Trading volume has surged to $2.48 billion, a 27% increase from the prior session, confirming the recent rally’s strength. However, volume has declined slightly in the last two sessions, which may indicate waning momentum. A sustained increase in volume during a pullback would validate a continuation of the uptrend.

RSI

The 14-day RSI stands at 68, hovering near overbought territory. While not yet exceeding 70, the RSI’s recent acceleration suggests a potential overextension. A close above 70 would signal a high-probability pullback, while a break below 50 would indicate a trend reversal.

Fibonacci Retracement

Key Fibonacci levels are derived from the August 6 low ($281.65) to the August 15 high ($296.47). The 38.2% retracement at $289.00 and 61.8% level at $285.00 align with recent price action, suggesting $285.00 as critical support. A break below this level would target the 78.6% retracement at $281.65.

Backtest Hypothesis

The backtest strategy of entering long positions when RSI exceeds 70 and exiting when it falls below 70 aligns with Amgen’s current RSI proximity to overbought levels. Historical data shows this strategy generated a 63.69% return with a Sharpe ratio of 0.22, outperforming the benchmark. However, the strategy’s 110.59% volatility and 0.00% maximum drawdown suggest it may be optimized for high-momentum stocks like Amgen, which exhibit strong trend persistence. Integrating this approach, a long entry near $285.41 with a stop-loss below $275.83 and a target at $296.47 (August high) could balance risk and reward.