On Mad Money Friday night, Jim Cramer checked in Dr. Clay Siegall, chairman and CEO of Seattle Genetics Inc. (SGEN) , a biotech on the front lines of oncology.
Siegall said their drug for metastatic bladder cancer is in its first full quarter of sales and doctors are embracing it as the leading treatment. The company continues clinical trials both in the U.S. and globally to see the drug used as front-line treatments.
Siegall was also bullish on Tukysa, the company's breast cancer treatment, which received FDA approval this month for advanced-stage HER2-positive breast cancer.
Let's check out the charts of SGEN.
In the daily bar chart of SGEN, below, we can see that prices have performed strongly in the past 12 months. Prices made a base pattern around the $70 level and then another upper level base pattern around $120. Prices are above the rising 50-day moving average line and the rising 200-day moving average line.
The daily On-Balance-Volume (OBV) line made only a small dip from February to March, which is similar to the modest decline in prices this February/March. The OBV line has firmed since late March and is not far from making a new high for the move up. A rising OBV line tells us that buyers of a stock have been more aggressive than sellers.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is well above the zero line in bullish territory. This indicator has narrowed significantly but renewed price strength may keep the MACD oscillator from crossing to a take profits sell signal.
In the first weekly bar chart of SGEN, below, we can see a long consolidation pattern/base pattern around the $70 or $60 area. Prices have rallied from that base to double. A triple from the base is the next price target -- the $180-$210 area. The 40-week moving average line is below the price action and in a bullish or positive slope.
The weekly OBV line shows a long rise and is not far from making a new high for the move up. The MACD oscillator is above the zero line and just crossed to another buy signal.
In this second weekly bar chart of SGEN, below, we wanted to show more price history to expand on the size of the base around $60. The base is more than two years in duration and has allowed for a lot of accumulation (buying). A triple from this base may not be bullish enough.
In this first Point and Figure chart of SGEN, below, we used daily price data and here SGEN has met its upside price target.
In this second Point and Figure chart of SGEN, below, we used weekly price data. Here the chart shows $286 as a potential longer-term price target.
Bottom-line strategy: The business of finding blockbuster cancer drugs can be feast or famine but it looks like SGEN is doing it right. Trade SGEN from the long side risking a close below $135 for now. We have prices targets from $180 on up to $286.
