Amgen Inc. - AMGN - close: 54.06 change: +0.81 stop: 51.54 *new*
As the broad market continues to vacillate in its current range, our AMGN play continues to behave in a methodical and predictable manner. Dips to the ascending trendline (now at $52.40) continue to be bought, as the bulls struggle to finally break convincingly above the $54.50 level. Tuesday's drop to that trendline provided a great entry into the play and the continued rebound in the stock has been dragging the lagging Biotechnology index (BTK.X) along for the ride. There's still no sign of the broad market breaking from its current range, but AMGN is looking like it really wants to break out. Pressure to the upside is starting to build, and it should result in a breakout over last week's high of $54.70. The conservative approach is still to buy on the dips near support, now in the $52.50-53.00 area, supported by the 21-dma ($52.68). Aggressive traders can target new entries on a breakout over $54.75, keeping in mind that there is significant overhead resistance beginning at $55-56, which will likely take some time to work through. Our stop-loss has been bumped up to $51.54, slightly under the rising 50-dma.
Tech Data Corp. - TECD - close: 22.08 change: +0.22 stop: 20.49
Flip between 5-minute charts of today's action in the NASDAQ and TECD, and you'll see almost no similarities. That's pretty rare. While most tech stocks don't follow the Composite tick-for-tick, there definitely tends to be a correlation; especially when it comes to general direction. TECD actually faded the NASDAQ this morning as it pulled back to an intraday low of $21.63. Then, while the rest of the market was experienced a post-lunchtime hangover, Tech Data recovered its losses and moved back into positive territory. The index and stock finally traded in tandem during the final hour, when both posted some rapid gains. This late-day bullishness was enough to push TECD above short-term resistance at $22.00. The fact that shares closed over that level indicates that a test of the relative high ($22.23) could be forthcoming on Friday. A move above that level might give aggressive traders a chance to target new entries. Should TECD experience a pullback, we'd expect to see continued support near $21.60.
Well, TECD certainly can't be accused of being a slow mover. Last week the stock displayed a bullish trend of steady gains as it filled in the large February 7th gap. Profit-taking on Monday and Tuesday morning erased some of those gains and briefly took TECD below $21.00. But with the NASDAQ rallying sharply during the second half of today's session, the bulls would not be denied. Shares went vertical with about two hours remaining and finished with a 1.4% gain. Suddenly the stock is within striking distance of its relative high at $22.33. In our most recent update we said that some profit taking could be expected to consolidate last week's gains. Now that this has occurred, we feel that TECD will be able to continue towards our upside target at $23.99. As far as new entries are concerned, aggressive short-term traders might want to watch for a move above $22.33. Our stop is set at $20.49. Those looking for less risk could use a stop just under today's low of $20.95.