Celgene (CELG) PriceWatch Alert Up To 57.25% Return

Posted on Monday, October 06, 2008 8:07 AM

Celgene (NasdaqNM: CELG) ended the last trading session at $60.46. 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 58.24 and resistance in the 64.20 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 65 covered call (LQH AM) for a net debit in the $55.96 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 7.44% downside protection and a 16.15% assigned return rate for a 57.25% 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 65 call (LQH AM) for a $27.05 debit. The trade has a 103 day life and would provide no downside protection and a 10.91% assigned return rate for a 39.00% 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]