Celgene Will Break Out of Sideways Trend, Eventually

Shares of Celgene (CELG) have been largely stuck in a $20 sideways trading range the past 12 months as it searches for its next sustained up or down trend.

This first chart of CELG, above, shows the sideways trading range largely confined to $110 on the downside and $130 on the upside. In July and August, CELG traded over $130. At the end of September, and briefly in August and May, prices did probe the $110 floor. Prices have crisscrossed the 50-day simple moving average and the On-Balance-Volume (OBV) line is not displaying a sustained trend or serious divergence.

Sometimes a longer-term frame chart gives us clues substantially different than the short-term view, but that is not the case with the chart above. Here we look at CELG with a flat 40-week moving average, a neutral OBV line and the Moving Average Convergence Divergence oscillator narrowing to another possible buy signal. Will CELG continue to trade sideways? Maybe, but a breakout will happen eventually. For now we think you should keep your options open. 

Employees of TheStreet are restricted from owning individual securities.