NEW DIRECTIONAL CALL PLAYS
Celgene Corp. - CELG - close 59.42 change +0.40 stop 39.50
Celgene Corporation is an integrated biopharmaceutical company primarily engaged in the discovery, development and commercialization of therapies designed to treat cancer and immune-inflammatory related diseases. It is involved in research in several scientific areas that may deliver therapies, targeting areas, such as intracellular signaling pathways in cancer and immune cells, immunomodulation in cancer and autoimmunity and placental cell, including stem and progenitor cell, research. The drug and cell therapies it develops are designed to treat life-threatening diseases or chronic debilitating conditions. The Company's commercial stage products include REVLIMID, THALOMID (inclusive of Thalidomide Celgene and Thalidomide Pharmion, subsequent to the acquisition of Pharmion Corporation, or Pharmion), VIDAZA and FOCALIN. FOCALIN is sold exclusively to Novartis Pharma AG, or Novartis. In January 2010, the Company acquired Gloucester Pharmaceuticals Inc., a pharmaceutical company. (source: company press release or website)
Key Support Areas: 58.00, 57.00
Key Resistance Areas: 60.00, 61.25
Time Frame: Several weeks
Why We Like It:
CELG looks like its perking back up after its recent sell off and has found solid support right at $58.00. The stock made a nice move on Friday as the overall market was under pressure. The stock also has upward trend line support but that trend line was violated during the plunge on May 6th. Remove that bar and the trend line looks solid. There is some resistance overhead at the 20-day SMA and 50-day SMA but I think the stock can overcome this. I believe the overall market will probably chop around for a few weeks and CELG could catch a bid as a defensive play. Our portfolio is short on long positions and this a good long to have with a good set up. We'll place as stop at $56.90 which is below the low on April 22nd and will adjust it higher if the trade get going in our direction.
Suggested Position: JUNE $60.00 CALL, current ask $2.62.
Entry on May xx at $xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 4.3 million
Listed on May 15, 2010
NEW DIRECTIONAL PUT PLAYS
Leggett & Platt, Inc. - LEG - close 24.08 change -0.23 stop 25.35
Leggett & Platt, Incorporated is an international manufacturer, which conceives designs and produces a range of engineered components and products found in many homes, offices, retail stores and automobiles. The Companyâ€™s operations are organized into 19 business units, which are divided into 10 groups under four segments: Residential Furnishings; Commercial Fixturing & Components; Industrial Materials; and Specialized Products. The Residential Furnishings segment includes Bedding Group, Furniture Group, and Fabric and Carpet Underlay Group. The Commercial Fixturing & Components Segment includes Fixtures & Display Group, and Office Furniture Components Group. The Industrial Materials Segment includes Wire Group and Tubing Group. (source: company press release or website)
Key Support Areas: 23.75, 23.00
Key Resistance Areas: 24.75, 25.15
Time Frame: Several Weeks
Why We Like It:
LEG is making a lower high on its daily chart and appears overextended at these levels. The stock has upward trend line support below but this support is about -8% lower from current levels. Resistance just overhead includes downward trend line resistance and recent highs at $24.75 and $25.15. I am looking for LEG to trade lower from here to about the $22.25 area which is our target. I suggest readers take advantage of this by initiating short positions in the stock. The overall market looks vulnerable here and LEG probably won't be spared. Our stop is $25.35.
Suggested Position: June $25.00 PUT, current ask $1.25.
Entry on May xx
Earnings More than 2 months (unconfirmed)
Average Daily Volume: 2 million
Listed on May 15, 2010