Amgen Returns to the Scene of the Crime

Amgen (AMGN), a big biopharma stock, broke out with expanding volume in July and hit a new 52-week high. After becoming short-term overbought, the stock fell back to the breakout zone. There are two things to note here. First, broken resistance turns into the first support zone. Second, a pullback to a resistance breakout is known as a "throwback". It is viewed as a test of the breakout, and a strong breakout should hold. The stock is showing signs of support with two bullish engulfing patterns in the last five trading days. Look for a follow through break above 171 to confirm the bullish engulfing patterns.

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