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Top Biotech Powering Higher on Breakout

Celgene broke from a cup-and-handle followed by a breakaway gap


Celgene Corp. (NASDAQ:CELG) — The biopharmaceutical company is scheduled to report 2012 earnings on Jan. 24, and analysts are expecting $4.88 per share versus $3.79 in 2011. Management provided encouraging guidance by adjusting earnings expectations for 2013 to $5.50-$5.60, up from a Zacks estimate of $4.91.

The company’s oncology drug, Abraxane, is expected to be a blockbuster with sales estimates of $1 billion to $1.5 billion in 2015. And, according to management, it has other potentially high revenue drugs in its pipeline.

The Trade of the Day recommended CELG on Feb. 16, at $75, and again on Oct. 23, at $74, since it is considered by S&P to have “the brightest growth prospects among large-cap biotech companies.”

In October, I said, “Buy CELG between $74 and the 200-day moving average at $72.24 for a trade to $81. Long-term investors looking for a high-quality biotech stock will want to hold CELG as a cornerstone of their portfolio since much higher prices are probable.”

On Monday, the stock broke from a classic cup-and-handle on high volume, and on Tuesday, it was followed by a breakaway gap. From a technical analysis standpoint, it just doesn’t get better than this. However, traders who have positions at $75 might consider taking profits at $95, while long-term investors should hold CELG for a move north of $100.

CELG Chart
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Trade of the Day Chart Key

Article printed from InvestorPlace Media, http://investorplace.com/2013/01/trade-of-the-day-celgene-corp-nasdaq-celg-4/.

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