Celgene Corp. (CELG) was reviewed in the middle of December and prices have continued to weaken. Unfortunately I suggested that, "Aggressive traders might look to buy a dip toward $105 risking below $99."
With hindsight we can see that would have cost you some capital if you followed that advice. Are prices more attractive at this new lower price level or should avoid CELG until stronger buy signals develop? Let's check the charts.
In this daily bar chart of CELG, below, we can see that prices were stable in December and then started making lower lows and lower highs in January. The decline accelerated in February and we have seen further weakness this month. Prices are below the declining 50-day moving average line and the declining 200-day line.
The daily On-Balance-Volume (OBV) line has continued to weaken since January despite the sideways trend in November and December. Traders and investors have remained aggressive sellers since early October.
In the lower panel is the 12-day price momentum indicator. Since November the indicator has made higher lows creating a bullish divergence when compared to the lower lows of price. This divergence has been going on for five months but I am not sure how bullish it could be with the bearish OBV line.
In this weekly bar chart of CELG, below, we can see that prices are well below the declining 40-week moving average line. The weekly OBV line has been declining the past three months but the 12-week momentum study is showing a higher low from December to March.
In this Point and Figure chart of CELG, below, we can see that prices have reached a downside price target but the downtrend is still intact. A rally above $97.41 is probably needed to turn this chart around.
Bottom line: The pace of the decline has slowed on CELG on the daily and the weekly chart but sellers of the stock are still being more aggressive than the buyers. I am in no rush to probe the long side again.