Amgen (AMGN)

Market Cap: 130.5B
Average True Range: 4.08
Beta: .54
Forward P/E: 16.23
Sector: Biotech
EPS Growth Next Year: 10%

Amgen just announced their recent quarterly earnings and beat on EPS, Revs, and raised guidance. That's a trifecta report and the stock is setup for further upside.

When the fundamentals back up a strong stock chart, the moves can be very powerful and high probability. I believe we are seeing this currently.

With a close above 172.75 today Amgen will breakout to new Daily/Weekly/Monthly highs. When multiple timeframes come together it only adds to the strength and reliability of the trade.    

Weekly
9-month base along a rising uptrend

Price has consolidated the recent 3-year bull market and is now attempting to resume above those highs. This breakout is also occurring on higher than average volume showing a strong accumulation of shares.

Indicators (weekly)

The MACD and Relative Strength indicators show a very strong and high probability uptrend resumption taking place. Volume has also increased well above average on this week's breakout.


Monthly

The long-term trend in AMGN is impressive, many may even say unsustainable. That may be so. But this is why we manage risk. As long as we make sure to exit the position when risk becomes elevated and keep our losses small, we will maintain our confidence and investment capital for the next winning opportunity.

Sticking with winning trades is an easier way to make money than trying to time lows and highs in the market. Think of it as swimming with the current rather than against it. The monthly trend here is 
pointing higher and the stock is giving us an opportunity to participate where our risk is well defined.

For risk management purposes we will be using the weekly timeframe to manage this position. The closing low of last week will act as our stop ($158.59). If that level were to fail the stock would have broken below the 50 DMA and 20 WMA, as well as failing to sustain the upward momentum. Should that be the case we will step aside and wait for a better opportunity.

Successful investing is about waiting for your pitch, Amgen has all the makings of a high probability and powerful uptrend resumption right now. I will take that chance every time.

Goodyear Tires (GT)

Market Cap: 7.8B
Average True Range: .72
Beta: 2.26
Forward P/E: 8.11
Sector: Consumer Goods- Rubber and Plastic
EPS Growth This Year: 287%
EPS Q/Q: 456.5%
ROE: 98.4%
P/S: .44

Goodyear Tires looks ready to move higher after forming a substantial base pattern at multi-year highs. The stock is cheap. It has pulled back roughly 15% off its recent 52-week high and is retesting the upper range of its base.

EPS is growing rapidly and the Forward P/E is just above 8. Price to Sales is .44 and PEG is .27 suggesting much more room to grow fundamentally.

While the stock has shown some recent weakness I believe that to be short lived and should be ready to resume higher from here.

Looking at the 8-year weekly chart, we can see that the stock is near its 2007 high and has cleared the key 61.8 Fibonacci retracement level, which often acts as strong resistance. Typically when this level is broken to the upside the prior highs will act as a magnet, pulling the price toward it.

Zooming in on the same weekly chart, price is retesting the upper range of the prior base. As polarity teaches us, prior resistance should become new support. The $28 level acted as a strong ceiling for prices for more than a year. The stock finally broke through on strong trading volume in early spring and is now going through a typical "throwback" type pullback.

I also like that the rising 20 WMA has caught up to price and is meeting it right at this critical retest area. When looking for favorable risk/reward setups I like to see a confluence of support at the same level.

It should be fairly easy for GT to at least retest its prior swing high near $37. This presents initial upside of more than 25% from current prices. With stops less than 6% away from the entry point it sets up to be a great bet to make.

The stock is cheap, growing earnings rapidly and a breakout is in motion. All things I look for. We will place our initial stop just below the breakout level and at the prior pivot low at 27.23 on a weekly closing basis.