Now, that's all nice, but REGN is still expensive. I mean this in the sense that it trades at over $500 per share; the expensiveness of a stock is not determined by its price - that is merely cosmetic - but rather its underlying fundamentals, such as its price to earnings multiple. With that being said, many retail investors don't like buying stocks that cost them hundreds of dollars per share (this is why companies issue stock splits). So, how can you get the same upside potential of owning 100 shares of Regeneron without dishing out upwards of $50,000? Use options.
I'm eyeing the July 17 $527.50 calls, which currently trade at about $10 per contract. In short, call options allow the investor to control 100 shares (per contract) of the underlying stock for the premium price, which in this case is $10. So in this scenario, paying $1,000 would give you control over the same amount of shares as would paying $50,000. The upside potential remains the same. To profit from buying these options, REGN would need to be above $537.50, and every dollar above that rewards you with $100. While Regneron is still, in my opinion, a longterm hold, buying the July 17 options would either supplement your current long position or act as a cheaper way to play the name. Did you know that this was written by an 18 year old? Read more about me here! A safe, legitimate and easy way to make passive income.
If you got in this stock 5 years ago, kudos. Regeneron has been in a well-defined uptrend for more than 5 years, as shown below. Like Nike, this biotech's stock has been consolidating and ascending in a staircase-like fashion, which is very bullish for the long term. This is very easy to see using a monthly chart.
Also, I placed the 10 and 40 week exponential moving averages (EMAs) on the chart to show that REGN found support at the 10 week EMA, and that moving average never crossed below the 40 week EMA, showing that the uptrend is very-much intact.
In the near-term, I spotted a bull flag, a reliable indicator that good things are coming for the stock. Below is my outline of the bull flag, as well as the intended target, which "coincidentally" is right at the same level as a 138% retrace. I say "coincidentally" because that is something far from coincidental. Fibonacci's ratios is the closest thing to magic that I've ever experienced.
The idea with bull flags is that as soon as the stock closes above the top portion of the flag (one of two parallel portions), it's off to the races. The percentage from the bottom to the top of the flag pole, the lone segment, can be copied and placed on the candlestick of the day a successful close above the top portion is achieved. This helps traders exit their move by estimating where the stock will begin to experience decent resistance once again.
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