Celgene Stock May Reward Bottom Fishers

Shares of Celgene Corporation plummeted from an all-time high in October 2017 after the company discontinued research on RESOLVE, a key drug application targeting Crohn’s Disease. A string of analyst downgrades into the Oct. 19 announcement raised eyebrows, suggesting that insiders were dumping the stock well in advance of the news. Selling pressure escalated once again on Oct. 26, when the company sharply lowered 2020 financial targets in its quarterly release.

The stock bottomed out at $94.55 after earnings, completing a 52-point, 35% rout, and it has been hugging the psychological $100 level for the past three months. Celgene stock barely budged following the company’s Jan. 25 earnings report, which met expectations outlined in a Jan. 8 preannouncement. Two big sell gaps remain unfilled, marking magnetic targets that may come into play in the coming months.

Celgene shares entered an accumulation phase two weeks ago, while the monthly stochastics indicator has dropped to the most extreme oversold reading since 2002, suggesting that selling pressure has run its course, ahead of a recovery effort that could post double-digit percentage returns. More importantly, the fourth quarter plunge held three-year support in the lower $90s, reinforcing a long-term trading range that could eventually yield a trip back above $140. (See also: How a Juno Takeover Could Boost Celgene.)


Celgene stock hit the most oversold technical reading in 16 years and could post double-digit percentage returns in coming months. …read more

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Category: CELG

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