Biotech Stock for Options Bears

The equity boasts affordable premium right now

Nov 22, 2023 at 1:48 PM
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Subscribers to Schaeffer's Weekend Trader options recommendation service received this AMGN commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Biotech stock Amgen (NASDAQ:AMGN) has plenty of technical pressure in place on the charts, making now a good time to weigh in with puts. The $273 region, which also rejected the stock’s September highs, has kept a cap on gains all November, after the equity rallied following its breakdown from a July-October uptrend. AMGN also broke out of its recent uptrend on the hourly chart.
 
Also on the hourly chart, Amgen stock’s 200-hour moving average has been keeping a cap on price action, while its 20- and 50-hour trendlines are getting ready to move in as resistance. The equity also just failed at the 275-strike, which is the December peak call level.

AMGN WT Repost November 222023

 
Options look like a good way to go when weighing in on Amgen stock, too. The security sports a Schaeffer’s Volatility Index (SVI) of 19%, which ranks in the low 22nd percentile of its annual range, meaning options traders are pricing in low volatility expectations at the moment. The stock usually outperforms these volatility expectations, too, per its Schaeffer’s Volatility Scorecard (SVS) of 89 out of 100.
 
Our recommended put option has a leverage ratio of 14.8 and will double on a 5.7% drop in the underlying shares.

 

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