Add CELG Calls

50-Day Breakout

By Bryan Bottarelli
Monday, September 21, 2009 1:27 PM EDT
Mon, 21 Sep 2009 17:27:00 GMT

PLAY: Buy the CELG October 55 Calls (LQH JK) at or under $2.40, good for the day. Place a protective stop limit at $1.50 and a sniper sell at $3.90.

Dear Bottarelli Research Member,

This morning, I asked whether or not this morning’s dip would get bought. By mid-day, the answer has become a little clearer, as the Dow has trimmed a 90-point deficit into a 25-point drop. From a chart perspective, the Dow continues to shrug off any sort of downward momentum. As a result, the rocket-ship move towards 10,000 remains in play.

In today’s action, the strongest sector is health care, specifically biotechnology. This has opened up a really nice opportunity to add calls on emerging biotech superstar Celgene (CELG – NASDAQ). CELG develops therapies to treat cancer and immune-inflammatory related diseases, including:

  • REVLIMIDL, to treat multiple myeloma patients.
  • THALOMID, to treat newly diagnosed multiple myeloma.
  • ALKERAN, to treat carcinoma of the ovary.
  • VIDAZA, to treat various subtypes of MDS.
  • RITALIN, to treat attention deficit hyperactivity disorder.
  • FOCALIN, to treat oncology-related disorders.

This portfolio of drugs helps CELG to collect three-month revenues around $2.45 billion. At the same time, CELG also has a stocked pipeline of potential drug candidates, one of which is a Phase III trial for small cell lung cancer. Add it up, and CELG offers you a strong combination of revenue-earnings drugs and exposure new drug candidates – a dream situation in the world of biotechnology.

CELG

And today, after weeks of consolidation at the 50-day moving average, CELG is making a strong upside move (triggered by an upgrade from Robert W. Baird). This could be the shot in the arm that sends CELG up to $58.00 and beyond. Let’s get positioned to ride this momentum now!

PLAY: Buy the CELG October 55 Calls (LQH JK) at or under $2.40, good for the day. Place a protective stop limit at $1.50 and a sniper sell at $3.90.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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