Blue-Chip Stock Could Soon Cool from Recent Rally

AMGN currently carries a 13% year-to-date lead

Digital Content Manager
May 31, 2022 at 3:07 PM
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Blue-chip name Amgen, Inc. (NASDAQ:AMGN) earlier reported its olpasiran therapy helped reduce cholesterol levels in patients with atherosclerotic cardiovascular disease (ASCVD), according to topline data from its phase 2 trial. Last seen up 0.1% to trade at $255.60, the equity last week fell short of its April 11 annual high of $258.45. What's more, there is reason to believe AMGN could further distance itself from that peak, which would bring its 13.9% year-to-date lead closer to breakeven.

AMGN

Specifically, Amgen stock appeared on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks trading within 2% of their 52-week peak, while sporting historically low implied volatility (IV). According to this data, there have been four other times in the last five years when AMGN was trading near these highs, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower. This is now the case with Amgen stock's SVI of 19%, which stands lower than all but 15% of readings from the last year. 

One month after these signals, the stock was higher just 25% of the time, and averaged a 0.5% drop for this time period. From where it currently sits, a similar move would place AMGN near the $254 mark.

The options pits lean pessimistic toward Amgen stock. This is per the equity's 50-day put/call volume ratio of 1.06 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than all but 10% of readings from the past year. This points to a healthier-than-usual appetite for long puts of late.

 

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