Amgen Inc. - AMGN - close: 54.64 change: +0.58 stop: 51.54
Talk about dependability! Every time AMGN approaches its ascending trendline, the bulls defend that support line with a vengeance and the resulting bounce invariably takes the stock up to test its recent highs. Last week was no exception, with an early dip to support on Tuesday that met with vigorous buying after the company reaffirmed its revenue growth (30-32%) and EPS growth (25-27%) forecast through 2005 at its investor's conference. Trading a low of the day just above $52.00, that news was the catalyst to drive the stock steadily higher throughout the week, ending with a new 10-month closing high of $54.64 on Friday. The trend remains very much intact and barring some unforeseen event over the weekend, AMGN looks ready to break through the $55 level next week. The ascending trendline that began last September has now risen to $52.50 and should continue to support the stock on successive pullbacks. While aggressive traders may feel compelled to chase the stock higher on a breakout over $55, their enthusiasm should be tempered by the strong resistance that is looming just overhead near $56 and continuing up through the $60 level. Additionally, AMGN has not shown a recent pattern of being able to sustain a breakout, instead pulling back after each higher high to consolidate and confirm higher support. So the best approach for entering the play remains to take advantage of rebounds from the ascending support line. This weekend, we're leaving our stop in place at $51.54, but will consider raising it once AMGN is able to close over the $55 level.
Tech Data Corp. - TECD - close: 22.59 change: +0.51 stop: 20.94 *new*
Earlier this week, TECD pulled back to consolidate some of its rapid gains from the relative low of $19.07. Buyers moved in at the Tuesday lows near $21.00 and pushed the stock up to short-term resistance at $22.00. Yesterday's late-session breakout above that level had us looking for a test of the short-term high at $22.33, and the bulls did not disappoint. TECD zoomed higher on Friday morning before topping out at a new relative high of $22.78. Shares spent the second half of the session trading in a tight range near $22.50. Tech Data finished with a gain of 2.3%, easily outpacing the NASDAQ. Pulling back to the daily chart to get a look at the bigger picture, we see that TECD has broken above its 21-dma ($22.44) as it continues to fill in the February 7th gap. With both the MACD and daily stochastics (5,3,3) looking bullish, the stock looks poised to continue its uptrend and move closer to our profit-target at $23.99. Traders looking for new entries can watch for a pullback and successful test of the $22.00 level, which should now provide support. Our stop loss for this play is now located one cent under Tuesday's low at $20.94.