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Amgen gains boost biotechs and NASDAQ-100

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Shares of biotech giant Amgen (NASDAQ:AMGN) $34.16 +10 are getting a boost today after broker Merrill Lynch said the company may have a marketing opportunity to promote its Arenesp treatment against Johnson & Johnson's (NYSE:JNJ) $51.11 +4.12% Eprex due to a change in mode of delivery of Eprex after side effects were first reported last year. Merrill thinks there could be downside to JNJ's Eprex sales estimates with upside to AMGN, and that if AMGN's Arenesp takes 50% share of the dialysis market, Eprex numbers could be trimmed by $400 million, which would reduce JNJ's top-line growth by a percentage point.

Amgen Chart - $1 box

Amgen (AMGN) $34 +10% is getting a nice little pop this morning and its trade at $34 was enough to have its chart reversing 3- boxes. The potential "good news" is perhaps just enough to get some sector bears locking in some gains as the biotech bullish % from Dorsey/Wright & Associates is quite "oversold" at 10% and bears carry some risk here. The first sign of strength for AMGN would be a trade at $39. Yes, this seems like "a lot" but is normal risk associated with more oversold bullish % readings.

The action in such a bellwether and more heavily weighted stock in the Biotech Index (BTK.X) 327.42 +6.7% has this sector leading today's gainers. AMGN also carries some weight in the NASDAQ-100 (NDX.X) 1,031.70 +1.04% and the NASDAQ-100 Trust (AMEX:QQQ) $25.65 ++0.43% and is helping this part of the technology market buck the declines in the Dow Industrials (INDU) 8,544 -1.09% and broader S&P 500 Index (SPX.X) 910 -0.85 this morning.

It should be noted that Amgen (AMGN) completed its acquisition of Immunex Corp. at the close of trading yesterday and shareholders of Immunex now own Amgen (AMGN).

Sigma-Aldrich Company (NASDAQ:SIAL) $46.80 +1.21% replaced Immunex in the NASDAQ-100 today.

Jeff Bailey
Senior Market Technician
Option Investor

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