Opinion: Three biotech companies to watch ahead of earnings

Harry Boxer focuses on Exelixis, ImmunoGen and Impax Laboratories

Here are three biotechnology companies and one services company that are displaying strong technical charts ahead of their earnings reports.

Exelixis Inc. EXEL, -2.49% extended out of its bull wedge consolidation pattern, gaining 88 cents to close at $28.11 on 3.8 million shares traded Monday. That’s the highest price the stock has reached since October 2000. The biopharma stock has gained over 90% this year and has progressed up a clear rising channel in the run-up to the company’s earnings announcement next Wednesday. Short-term target is $29.50-$30.

ImmunoGen Inc. IMGN, -3.47% snapped back Monday to $6.34, up 68 cents, or 12%, on 4.3 million shares traded. The stock bounced off the bottom of its rising channel as well as its 50-day moving average after having pulled back from its channel top in the last three weeks. The move came on no apparent news, although the company announces second-quarter earnings Friday. With continued momentum, price could move up to $8-$10 in the next few weeks.

Impax Laboratories Inc. IPXL, +3.47% is on the move, having recently broken out of a head-and-shoulders bottoming pattern. The stock closed at $18.75, up 60 cents, or 3.3%, on 1.5 million shares traded and no news, and is now up more than 40% off its mid-June low of $13.25. The stock saw large gains last week with news of FDA approval of a generic version of its ADHD drug, Concerta, and expected product launch by the end of 2017. The company is expected to report earnings Aug. 8 before the market opens. The next target range is $20-$23.

Outside of biotech, CAI International Inc. CAI, -2.38% is seeing excellent follow-through from last Friday, when price popped all the way up to a high of $26.12. On Monday the stock gained $1, or 3.8%, to close at a three-year high of $26.93 on 427,600 shares traded. Analysts have dramatically increased earnings expectations for the transportation finance and logistics company in recent weeks, and earnings will be announced this Wednesday after the close. The stock is being traded at some of the heaviest volume this year. Having already blown through significant resistance in the $25-$26 zone, price could easily reach $30 in the near term. The price channel shows that this could be a $40 stock or more in the longer term.

By Harry Boxer

Source: https://goo.gl/hxnn7e