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Walgreens (NYSE:WAG) and Genentech (DNA) are both highly followed large-cap stocks that have acted quite differently this year.

Lets look at Walgreen Co. first. This is a stock that started the year at $45, glided down to $40, stormed to $52 in 4 months, and dropped back down to $40 towards the end of last month, primarily due to concerns that Walmart (NYSE:WMT) would start selling prescriptions at a discount.

While it is difficult to predict political, competitive and other external circumstances,, and their effects on Walgreen, the giant drugstore chain announced bullish same store sales exceeding 9% on Monday, clearing a nice double bottom on high turnover. I am bullish on Walgreen and I believe the stock can hit 48 without blinking - therefore I recommend buying it. In fact, I bought Jan 2008 $50 calls on Tuesday.
Rx symbol
Now Genentech - here is a giant that outperformed the best of drug stocks despite being a mega cap for most of this millennium so far. However, this year has been a depressing story for DNA. The stock has not produced any gain for its investors for much of this year but technical investors are starting to eye this one again due to the long and tight base formation that is now 8 months long.

Earnings have been growing at 60% and the stock, although expensive compared to its largest competitor Amgen (NASDAQ:AMGN) , looks like it is about to breakout. I recommend a buy here with accumulations at every $2 that the stock goes down. If the stock gets to $76, it is a screaming buy. I bought Jan 2008 $100 calls today.

DNA vs. WAG 1-yr chart:

Walgreen\'s vs. Genentech

Source: Walgreen Co. and Genentech: Two Ways to Play the Drug Sector