Amgen (AMGN): The Case for Multiple Time Frame Analysis

10/21/2010 12:01 am EST

Focus: STOCKS

Tim Bourquin

Co-Founder, The Traders Expo and The Futures & Forex Expo

I have always been a proponent of looking at longer-term charts, even as a short-term trader. The more long term the chart, the more important the levels of support and resistance become.

If you are always looking at short-term charts and can’t understand why a stock or ETF can’t break through a specific level, you can often find the answer on a long-term chart. Perhaps that level was a previous high or low on a monthly or even a yearly chart.

Amgen (AMGN) is a good example of this. On the annual chart below, you can see it has been forming a wedge and is close to the upper line.


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On a daily chart, AMGN has broken above its 200-day moving average:


Click to Enlarge

Both the long- and short-term charts indicate to me that AMGN may be ready to head toward it’s previous yearly high (in 2008 and 2009) of around $65.

The more time frames that indicate the same move, the better the chance of that trade playing out. When I see something positive on both a yearly chart and daily chart, that’s my kind of trade.

By Tim Bourquin, trading content director, MoneyShow.com

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