When we last looked at Celgene Corp. (CELG) in late October, we said, "a lot of price damage has happened in a relatively short period of time. I would be in no rush to be a buyer. This kind of decline typically needs a long period of repair -- backing and filling or consolidation to demonstrate that prices have stabilized and new buyers have shown up."
In the past two months the price of CELG has edged higher and the On-Balance-Volume (OBV) line has turned up as well. We haven't seen a really good retest of the late October low so only aggressive and experienced traders should consider the long side of CELG right now.
In this daily bar chart of CELG, above, we can see that prices have managed to climb back to the declining 50-day simple moving average line. The price action of the past week or so looks like a bull flag formation so we should be anticipating further upside gains soon. The trading volume in late October was very heavy with over 60-million shares and this is the kind of activity you see at a climax low.
The On-Balance-Volume (OBV) stabilized in November suggesting that bulls and bears were in balance. In December you can see that the OBV line has been improving signaling that buyers of CELG had become more aggressive. The Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal in early November and is close to crossing above the zero line for an outright go long signal.
In this weekly bar chart, above, we can see that CELG held the 2015-2016 lows around $95. The weekly OBV line is quickly reversing its prior decline while the MACD oscillator has started to narrow toward a possible cover shorts signal.
In this Point and Figure chart of CELG, above, we can see the sharp decline without the price gaps on other charts. A decline below $106.54 is needed to turn the chart to a column of "O's". A nearby price target of $113.43 is shown, but more gains could be possible.
Bottom line: Aggressive traders might look to buy a dip toward $105 risking below $99.