The 20 Best September Stocks

Technical resistance could be tackled on another strong September

by Karee Venema

Published on Aug 28, 2017 at 12:29 PM
Updated on Aug 28, 2017 at 2:04 PM

Biotechs are buzzing today on news of Gilead Sciences' $12 billion buyout of cancer specialist Kite Pharma Inc (NASDAQ:KITE). While KITE's 28% surge serving as a tailwind for the sector, drug stocks could continue to be in focus next month, considering several pharma names top the list of best stocks to own in the tough trading month of September. Here's a closer look at Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)Celgene Corporation (NASDAQ:CELG), and Regeneron Pharmaceuticals Inc (NASDAQ:REGN) ahead of a historically bullish month for the shares.

best stocks to buy september

Alexion Stock Nears Familiar Resistance

Sector tailwinds have ALXN stock up 1.2% today to trade at $139.06. The security has now added more than 44% since hitting a nearly three-year low of $96.18 in late May, but is running into familiar resistance in the $140-$145 region -- a neighborhood that's contained ALXN shares for the past 14 months. If history is any guide, the stock could overtake this area over the next several weeks.

Specifically, according to data from Schaeffer's Quantitative Analyst Chris Prybal, ALXN stock has averaged a 5.7% gain over the past 21 Septembers, ending the month in positive territory 57% of the time. A monthly win of this magnitude would put Alexion shares near $147, territory not charted since early June 2016.

It's a prime time to bet on ALXN's trajectory with options, considering low volatility expectations are being priced into the stock's short-term options -- a potential boon to premium buyers. Not only does Alexion's 30-day at-the-money implied volatility of 28.5% ranks in the 5th annual percentile, its Schaeffer's Volatility Index (SVI) of 27% ranks in the bottom percentile of its 12-month range.

Celgene Shares Bounce From 80-Day Trendline

After hitting a two-year high of $139 on July 27, CELG stock pulled back to its 80-day moving average -- a trendline that, along with its 120-day counterpart, worked as a springboard for the shares after the early November U.S. presidential election. The security bounced from here last week, and is up 2.1% today to trade at $132.34.  

More gains could be on the horizon, if history is any guide. Over the past 30 years, Celgene stock has averaged a 5.3% gain in September, and has been positive more than half the time. 

Plus, short-term Celgene options are priced at attractive levels, per the equity's SVI of 20% -- in the 18th percentile of its annual range. Likewise, CELG's Schaeffer's Volatility Scorecard (SVS) is docked at 76, suggesting the shares have exceeded options traders' volatility expectations over the past year.

Regeneron Options are Attractive

Regeneron shares are up almost 32% year-to-date, including today's 1.2% pop to hover near $483.30. However, the stock is still staring up at its 60-day moving average -- a trendline that's kept a tight lid on REGN in August, following disappointing sales data for its eczema drug.

This trendline could be tackled, though, should REGN post another positive September. Over the last 26 years, Regeneron stock has averaged a 4.3% monthly gain, with a 58% win rate.

REGN's short-term options are currently priced at attractive levels, from a volatility standpoint. While the security's SVI of 29% ranks below 93% of all comparable readings taken in the past year, its 30-day ATM IV of 32.8% ranks in the 37th annual percentile.


a schaeffer's exclusive

5 HOT STOCK PICKS

Heat up your summer trading with this FREE insider report!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


This Might Be the Ultimate Cannabis Stock
This innovative company could help investors see some major upside.
3 Drug Stocks Seeing Unusual Options Trading Today
The FDA approved Sesen's request to move manufacturing for its bladder cancer drug
BofA-Merrill Lynch: Buy This Shoe Stock Before Earnings
The brokerage firm thinks the retailer can rally another 26%
This Might Be the Ultimate Cannabis Stock
This innovative company could help investors see some major upside.