MRK

MRK

Hamilton

mrk feb 13 2016

We use a semi-log scale. This makes the rise from the early eighties look like a perfectly straight channel. We are not entirely sure of the early part of the EW count, but we are pretty sure that the 4th wave is where we think it is. Also the orthodox top might be to the left of what is shown but this does not materially affect the analysis.

First note that this stock never fell back to the 4th wave of previous degree, this simple means that it may still do that! The mess up there over the last 15 years is simple a series of a-b-c’s as far as we can tell, that is corrective and not impulsive so there is little reason to believe that we are in a new bull market. Taking all that into account a target of $15 emerges.

HPQ may have a similar structure.

AMGN

Hamilton

amgn 2010 amgn 2010 2

Big Pharma has been giving mixed signals. Amgen is a good example as it has , arguable, spent the last two years going absolutely nowhere with higher lows and lower highs, suggesting the possibility of a triangle. These only occur as waves 4 in a 5-wave sequence, or as waves B in an A-B-C. The short-term chart on the left seems to favor the notion that the triangle is a B wave and consequently an explosive thrust up should start any moment (perhaps today with the announcement of a new prostate cancer drug). The longer-term chart on the right leaves more possibilities, one of which suggest that this might in fact be a 4th wave of C in a multi year corrective move that is not yet complete. A breakout either way will clarify the situation.

By comparison I have added charts of PFE , BAX  and MRK.

PFE 2010 pfe 2010 2

Pfizer, see previous comments, overall favors the bull case having already lost 80% of its value. Today’s dividend announcement may push the stock through the upper trend-line.

BAX 2010 BAX 2010 2

BAX also favors the upside, that is at least to the level of the b-wave in the last A-B-C correction. MRK, see previous comments, is presently sitting in the middle of nowhere

In conclusion, a buy with a tight stop would be the way  to go on AMGN.