Your thoughts about Celgene and St. Jude Medical would be very much appreciated. I look forward to viewing your analyses of and advice on these companies.
Thanks for the assignment. I will analyze Celgene Corp. (CELG NASDAQ) today and St.Jude Medical Inc. (STJ NYSE) next time. CELG is focused on the discovery, development, and commercialization of drugs used in the treatment of cancers and inflammatory disorders. The drivers to 2020, as articulated by management in a recent corporate presentation, include capitalizing on their strength in hematology, expanding the oncology franchise, and building on their immunology and inflammatory platforms.
The research indicates that CELG has a number of compounds in Stage III trials. In the pharmaceutical space trial results are where we can expect a flex point in the movement of the stock. A March 20, 2015 press release announcing positive Stage III results helped lift the shares to the 52-week high. If this is a stock you want to own then you need to review the multiple trials that the company is involved in and track the progress of their efforts.
A study of the charts will inform my thoughts on CELG.
The three-year chart outlines the advance that started in mid 2012 as the shares caught a lift off of $30.00. In September of 2012 a golden cross surfaced and was followed in December by a break above resistance at $40.00. From there investors enjoyed continued capital appreciation to a 52-week high of $129.06 in March of 2015.
There was a pullback in 2014 but support at $70.00 held setting the stage for the new leg up. The MACD and the RSI generated buy signals concurrent with the bounce off support.
The six-month chart indicates that the MACD and the RSI both generated buy signals in mid March ahead of the release of the Phase III results. What is evident is that CELG has pulled back from the high and is testing support near $115.00. The next scheduled announcement will be the release of Q1 results on April 30th. Currently the momentum indicators are flat.
CELG is a growth story that has been very generous to investors who got on the ride in 2012. Don’t shoot this running horse.
Next time I’ll examine St. Jude Medical Inc. (STJ NYSE) for you.
Make it a profitable day and happy capitalism!