AMGN LONG compared with the DOW

15 Jan 2021

In order to enhance your plays when it comes to options(stocks), it will help to compare the stock to its relative index it is in. This was a stock I happened to come across just doing some random backtesting and saw a nice 4hr candle that could potentially cause a reaction for more upside. I forgot about it and came back about 2weeks later and saw my area was triggered. We got a reaction to the upside exactly what I was looking for. The second entry came at a time when the indexs (SPX, US30, NAS100) were selling off, so I was looking for any divergence between the stock and its pair. As you can see, the DOW created a lower low basically running for stops while AMGN was holding structure. This was a very strong confirmation of this trade panning out because whenever the DOW would gain strength, it would push AMGN higher and that is seen through current price. The target price is $250 where lies a gap in the market so I am looking for that to get filled. Divergence in the market is when two correlating assets are doing opposite things. If you can spot a divergence aligned with any other confirmations you may have, the trade will most likely playout nicely

15 Jan 2021

Catatan