Although stocks are likely to get cracked today, they have likely put in a short-term bottom. Since Yesterday, the NASDAQ hit 2900 and pivoted north. It is the fourth time in the last six-months that the leading index found support at the level.
Investors need to pay extra-close attention to the proverbial technical buy/sell line in the sand. If the index closes enthusiastically below the firewall, then most, if not all of 2012’s early gains could be erased. As long as the NASDAQ stays on top of 2900, the worst investors should expect is sideways trading.
While equities are still in the plus zone, TEN suggests following Warren Buffets advice and buying good companies, putting the buy low sell high strategy into action. Top Equity would recommend using our sector selector as a starting point to find candidates in the buy columns.
During our nightly scans, we found one from the Mature Buy list, Celgene Corporation (CELG). Celgene is a biotech that discovers, develops, and commercializes various therapies to treat cancer and immune-inflammatory related diseases primarily in the United States and Europe.
Despite the red tape on Tuesday, CELG managed to put in a plus day of work and may have found a near-term bottom near $69. The biotech’s shares are oversold as evidenced by a bottom fishing RSI close to 30. (see chart below)
With the biotech sector poised to outperform in the days and weeks ahead, buying Celgene Corporation (CELG) around $70 would be a great risk to reword opportunity in Top Equity’s view.
On the downside, we suggest limiting losses and risk by selling the stock if it closes or is about to close under $69, which puts potential losses near $1. As for upside, a nice rally in the stock’s price, and rebound in the overall market, could lift shares to the 50-day average of $75.86, or a possible gain of $5.86 on stock bought at $70.
If we are right, the trade offers nearly a 6:1 reward to risk ratio, and that’s just the way Top Equity News likes it.
Celgene (CELG) Technical Analysis by Top Equity News
Trading Ideas: Celgene Corporation (CELG) Oversold and ready to Go Higher is an article from: 
