Trade-Ideas LLC identified

Celgene

(

CELG

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Celgene as such a stock due to the following factors:

  • CELG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $372.0 million.
  • CELG has traded 534,421 shares today.
  • CELG traded in a range 370.3% of the normal price range with a price range of $12.73.
  • CELG traded below its daily resistance level (quality: 305 days, meaning that the stock is crossing a resistance level set by the last 305 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on CELG:

Celgene Corporation, a biopharmaceutical company, discovers, develops, and commercializes therapies to treat cancer and inflammatory diseases in the United States and Internationally. CELG has a PE ratio of 49. Currently there are 12 analysts that rate Celgene a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Celgene has been 4.4 million shares per day over the past 30 days. Celgene has a market cap of $102.9 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.07 and a short float of 1.4% with 2.87 days to cover. Shares are up 11.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Celgene as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, reasonable valuation levels, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 21.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, CELG's share price has jumped by 35.82%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for CELGENE CORP is currently very high, coming in at 96.94%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CELG's net profit margin of 15.63% significantly trails the industry average.

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