Amgen Looking to Open Higher

8:50am (EST) Amgen (AMGN, $52.23, up $0.18) is no stranger to the Blog and last night after the closing bell the company released some great news about one of its cancer drugs. In after-hours trading last night the stock was up $7 to $59. The company has been in late stage trials with its experimental drug, denosumab, which targets bone-related issues in patients with breast cancer. It could breathe new life into a company that has been struggling for growth and renew confidence on Wall Street as the company moves forward. The stock failed to take part in the huge rally we had from March until now and had been stuck in a trading range of $47-$52 after starting the year at $60. I don’t wan’t to babble about Amgen all Blog and you know we are late to the party with the July call options. But that doesn’t mean there isn’t a chance to daytrade them. The July 55 call options (YAAAGK, $0.23) closed at a QUARTER yesterday and they will we worth at least $4 if the $59 price tag holds up. Let’s put that in English. If you bought these calls on Tuesday, it would have cost you $230 to buy 10 contracts. If they open at $4 this morning, you now have $4,000. It gets better. The July 57.50 calls (YAAGY) closed at 7 cents yesterday. They would be worth $1.50 and you just turned $70 into $1,500. Amazing. If there IS a trade it MIGHT be with the July 60 calls (YAAGL) which closed at 4 cents yesterday. If the stock opens at $59, these calls will still be out-of-the-money BUT could trade higher if Amgen breaks $60. Now, from here you want to look at where resistance is. Looking at a chart, it appears as though resistance will be at $60. Howver, once past $61-ish, we could see a run to $65. Either way, the stock is on the verge of multi-year highs. It will be tricky getting in and out of this trade and watch for any “backing and filling” right after 10am. If we don’t get that and the stock breaks $60-$61, you may be able to ride the July 60’s for some quick profits. Of course, all of this could mean good news for Dendreon (DNDN, $24.02) today… Rick@MomentumOptionsTrading.com]]>

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