We're sorry, we haven't looked in on Celgene Corp. (CELG) for some time now, but now that prices have nearly reached our $140 price target a fresh look is warranted. Not to mention that the CEO is appearing on CNBC this Thursday morning.
Way back in December we said, "Aggressive traders could look to buy CELG around $110 and risking a close below $104 for now. Conservative traders could go long CELG after two consecutive closes above $120. A rally to $140 is our first upside price objective." Now that prices touched $139 last month we need to extend our road map.
In this updated daily bar chart, above, we can see that the rally in CELG was kicked off with a strong upside gap back in November. Prices surged higher on strong volume but a three-month consolidation pattern followed before a fresh advance started. Prices are currently above the rising 50-day moving average line. CELG is also above the rising 200-day line which was successfully tested at the end of May and beginning of June.
The On-Balance-Volume (OBV) line follows prices since November. A strong move up in November is followed by a long sideways period until June when buyers became more aggressive and the OBV line moved to a new high. The Moving Average Convergence Divergence (MACD) oscillator turned positive again in June as it crossed above the zero line.
In this weekly bar chart of CELG, above, we can see a large saucer-like formation as prices peaked in 2015 and then slowly declined to around $95 before bottoming and turning back up again. Prices are above the rising 40-week moving average line and within striking distance of the 2015 zenith. The weekly OBV line has been steady the past two years but there is a more positive shift since late 2016.
The MACD oscillator on this weekly timeframe is in a bullish mode as it has been since November.
In this Point and Figure chart of CELG, above, we the rallies and corrections for the past 12 months. A trade up to $139.38 would be a fresh breakout on the upside. There is a longer-term price target shown at $173.51.
Bottom line: If you like to look for price patterns the weekly bar chart (above) is awesome, I think. Looking to add to your CELG long position? I would buy it around current levels or above $140. A close below $130 would be my risk level for new longs.