Celgene (CELG) PriceWatch Alert Down To $61.67 Break Even

Posted on Monday, September 29, 2008 8:07 AM

Celgene (NasdaqNM: CELG) ended the last trading session at $66.27. So far the stock has hit a 52-week low of $41.26 and 52-week high of $77.39. Celgene stock has been showing support around 62.43 and resistance in the 68.41 range. Technical indicators for the stock are Bearish and S&P gives CELG a positive 4 STAR (out of 5) buy rating. CELG appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '09 70 covered call (LQH AN) for a net debit in the $61.67 area. That is also the break even stock price for this trade. This covered call has an 110 day duration, provides 6.94% downside protection and a 13.51% assigned return rate for a 44.82% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the CELG Jan '10 35 Call (WYO AG) and selling the Jan '09 70 call (LQH AN) for a $30.50 debit. The trade has an 110 day life and would provide 1.16% downside protection and a 14.75% assigned return rate for a 49.00% annualized return rate (for comparison purposes only). Celgene does not pay dividends at this time. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]