Bulls Expect This Drug Maker to Rally
"Fast Money" Contributor
Drug developer Celgene is expected to release data on from two studies in coming weeks, and the bulls are looking for a rally.
OptionMonster's tracking systemsFriday detected heavy buying of the May 60 calls, which traded almost 8,000 times against open interest of 6,850 contracts. A large block priced for $0.62 that accounted for most of the volume, but premiums subsequently climbed to $0.78 and even $1.03 on large trades.
Celgene rose 0.68 percent to $59.42 Friday, and is down 4 percent in the last month. The biotechnology company, which uses gene and protein regulation to treat cancer and inflammatory diseases, is scheduled to present data at the American Society of Clinical Oncology's annual meeting June 4-8, though some of the information could be released as early as May 20.
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The stock gapped higher after better-than-expected sales and earnings on April 29 but then headed lower along with the rest of the market. Celgene is also scheduled to appear at the Citi Global Healthcare Conference at 11 a.m. on May 26.
The shares already seem to be bouncing off support around $58. They only need to climb 3-4 percent by expiration for the call buyers to turn a profit.
Overall options volume in the name was more than twice its average level, with call buying the dominant theme.
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Najarian owns CELG shares.