The American pharmaceutical company Celgene Corporation is a specialist in the manufacture of drugs for various types of cancer and immune system diseases. Throughout the entire year, the stock was continuously moving upwards, and is now forming the next correction. A buy opportunity? In this technical analysis, we will examine this question in detail and explain why this stock belongs on every watch list.
Rally of resistance
In the daily chart, an established upward trend is clearly visible; this trend has consistently held itself above the SMA 200. The prices have developed a pronounced trend over several months, which makes this stock more worth considering for mid- to long-term trades with a duration of several weeks. So far, the current correction has corrected up to about 50% and could turn at the SMA 50; if a signal forms in the subordinate timeframes, an entry would already be possible here. If the SMA 50 breaks, our trend is still in time – a further correction here would just play into our hands, making our price potential until the first target at 146 USD even more attractive.
Wait for clear signals, consider the trend size
In the hourly chart, the subordinate trends are clearly visible. For a signal, we must always make sure we have the right trend size here: a signal in the trend size as depicted in blue would be the right choice here.
An entry would occur either via the P2 at the trend reversal, or not until out of the following correction on the hour. The stop management would take place according to trend trading under the respective last low of the hourly trend. Alternatively, the stop can be placed at the daily low and trailed behind with a trailing stop. When doing so, inside bars must be taken into account here.
The first partial sales for profit-taking should occur at the latest at 146 USD. In this zone, the prices are located at an important decision zone; where other market participants are now just getting in, we want to be taking our first profits already.
Before making an entry, one should take news into account. In addition, one should also observe the overall market as well as the actions of the central banks.
CELG will announce its earnings on October 26th before market opening. We should definitely wait for these, and the stock should remain under observation in our personal watch lists until clear signals form and the quarterly figures are processed by the market.
Entry: depending on the formation of the hourly trend, between 130 – 140 USD
Stop: depending on the formation of the hourly trend, below the last low
Targets: at 146 USD and at 155 USD
Disclosure of possible conflicts of interest: at the time of publishing this analysis, the author is not invested in the securities or underlyings discussed.
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