Celgene on the Verge of a Bull Channel Breakout

by Sam Collins | December 9, 2013 1:00 am

Celgene (CELG[1]) — 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[2], near $164, and has been on the Trade of the Day buy list[3] for over a year.

On Oct. 4[4], I said, “On Jan. 9[5], with CELG just above $ 91, I noted that S&P said it had ‘the brightest growth prospects among large-cap biotech companies.’ And on March 18[6], at $111.25, I pointed out that it had broken from a cup-and-handle formation with a target of $125.”

S&P has raised its target several times this year, recently boosting it to $188 from $172. Earnings are estimated at $5.36 this year and $6.54 in 2014.

Technically, the stock is in a powerful bull channel with support roughly at its 50-day moving average at $155. CELG can be volatile, but an increase in buying in the last two weeks is telling us that a breakout through the upper resistance line is likely.

Buy now with a trading target of $180. A trailing stop-loss order should be entered under $155.

CELG Chart
Click to Enlarge

Chart Key[7]

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– Sam Collins, InvestorPlace Chief Technical Analyst

  1. CELG: http://studio-5.financialcontent.com/investplace/quote?Symbol=CELG
  2. Top Stocks to Buy for December: https://investorplace.com/2013/11/top-stocks-buy-celg-pg-qcom-sndk-tdy-yhoo/view-all/
  3. Trade of the Day buy list: https://investorplace.com/category/options-trading/trade-of-the-day/
  4. On Oct. 4: https://investorplace.com/2013/10/trade-of-the-day-celgene-corp-celg/
  5. On Jan. 9: https://investorplace.com/2013/01/trade-of-the-day-celgene-corp-nasdaq-celg-4/
  6. on March 18: https://investorplace.com/2013/03/trade-of-the-day-celgene-corp-nasdaq-celg-6/
  7. [Image]: https://investorplace.com/wp-content/uploads/2013/05/chart-key.gif
  8. Beat the Bell: https://order.investorplace.com/?sid=FQ8104

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