Celgene (CELG) — This company develops small molecule drugs for the treatment of blood-borne and solid-tumor cancers and inflammatory diseases. The stock was on my list of Top Stocks to Buy for December, near $81 (post 2-for-1 split), and has been on the Trade of the Day buy list for over a year.
CELG succumbed to the sell-off in the biotech sector, hitting a low under $70 in mid-April, but has since recovered and made new all-time highs.
S&P has a “strong buy” rating on shares with a target of $104. It recently raised its earnings estimate for 2014 to $3.64 from $3.60. Adjusted Q2 EPS came in above its target at $0.90 versus an expected $0.86.
Following the shake-out of the industry in March and April, CELG formed a huge cup-and-handle and is in a powerful long-term bull channel with initial support at its 50-day moving average at $85.48. Near term, the stock has found support there and should shortly trigger a buy signal from MACD.
CELG has an excellent chance of breaking to a new high above $90.50. The trading target is $110, but investors could do much better by holding this high-quality biotech long term.