Celgene Corporation (CELG) is with its subsidiaries, is an integrated bio-pharmaceutical company engaged primarily in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases. The stock is currently trading around $139.13 at the upper end of its 52 week range of $83.16-$140.72. The stock has been out performing the market this year rallying 24.37% year to date. CELG is scheduled to report earnings after the closing bell today, and the stock is up $0.87 or 0.63% on the session ahead of the close.
Over the past 12 quarters CELG has rallied on earnings day 7 times with an average move of 3.43%. The stock appears bullish on a chart going into the release having ripped through the bottom to the top of the Ichimoku Cloud over the past month on the daily bars. Over the past 12 quarters CELG has rallied from earnings to the nearest options expiration 7 times with an average move of 3.57%. The stock looks as if it could continue rising following the recent bullish trend. Investors are expecting to see strong revenue due to the company’s release of a new drug called Revlimid. With a bullish technical analysis and great earnings performance in the past it is hard to justify anything, but a long position on CELG.
The options market is currently implying a move of around $1.72 or 1.2% in CELG by this Friday’s close giving us targets of $137.41 and $140.85.
Trade: Buy this week’s 140-141 Vertical Call spread for $0.28
Risk: $28 per lot
Reward: $72 per lot
Break Even: $140.28
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