Celgene Remains in an Uptrend

Meanwhile, Celgene's operational efficiency continues to improve, aided by the company's dropping of low-margin drugs. Hence, margins should increase to about 40% in 2010 from a projected 36% in 2009. The First Call FY2009/FY2010 EPS estimates for CELG are $2.08 to $2.67.

The risks include a U.S. economic recovery that does not accelerate as expected, starting in 2010, and/or clinical trial failures for a major pipeline drug.

Technically, as noted Celgene's stock chart has encountered resistance at/near $58, but remains in an uptrend: CELG traded below $40 earlier this year. The uptrend, combined with both gap-up support and psychological support at $50, keeps the scale tipped in favor of the buy rating.

Stock Analysis: Celgene Corp is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in CELG now; then buy another 25% in one month, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your CELG position before February 2010. Sell/stop loss if you were to buy shares in this company: $34.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.