Celgene's Flat Base Part Of Larger Pattern

Celgene CELG is seven weeks into a flat base.

The pattern is contained within a correction of 45% from October highs.

The flat base may be interpreted as the handle of a cup-with-handle base. If so, however, the handle lies in the bottom half of the overall pattern, making it suspicious.

Celgene's flat base is trading tight and has found support at the 50-day line. However, the 200-day line has provided resistance.

The cancer drug maker's Accumulation/Distribution Rating climbed recently, to B+.

Celgene's earnings rose 72% in the latest quarter. Results slowed modestly from triple-digit gains two quarters earlier. Sales growth topped 40% each quarter since the third quarter of 2006.

Celgene's three-year earnings growth rate is 89%, its three-year sales growth rate 57%. It also posted gains in annual earnings every year since 2002.

Analysts predict the streak will continue with 43% and 50% EPS gains in '08 and '09, respectively. Return on equity and pretax margins are at all-time highs.