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Overbought Biotech Still a Good Buy

Celgene's breakout is so strong that it could remain overbought for some time

   

Celgene Corp. (NASDAQ:CELG) – This company is considered by S&P to have “the brightest growth prospects among large-cap biotech companies.” Its impressive performance was led by its cancer products Revlimid and Vidaza. The company also has a number of other products in the pipeline awaiting FDA approval.

Earnings are expected to reach $3.20 in 2011 and $3.80 in 2012, and gross margins are expected to maintain 93%. Analysts target the stock at $75 to $85 within 12 months.

Technically CELG broke from a compound top on Sept. 20 on heavy volume, and even though the stochastic appears overbought, the breakout is so strong that it could remain overbought for some time. The trading target for CELG is raised to $75.

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Article printed from InvestorPlace Media, http://investorplace.com/2011/10/trade-of-the-day-celgene-corp-nasdaq-celg/.

©2014 InvestorPlace Media, LLC

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