Well, it may not have been the prettiest or a well-organized reversal from CEL-SCI Corporation (NYSE:CVM), but it was a reversal nonetheless. With CVM back on the bullish side of its key moving average lines, would-be investors can wade back into a position with a little bit of comfort.
For any newcomers, CEL-SCI makes vaccines. It's perhaps best known for its Multikine vaccine, which is currently in Phase 3 trials as a treatment for head and neck cancers. Prior testing has shown tremendous efficacy, and it would be surprising if CVM didn't ultimately win the FDA's approval of Multikine as a head and neck cancer drug.
There's more to CEL-SCI Corporation's pipeline than Multikine though. Indeed, it's the company's vaccine-building platform that put CVM front and center with traders of late.
Although the current bird flu outbreak in China is apt to be contained before it becomes a global pandemic (halted before it spreads out of control, like SARS, swine flu, and the first round of bird flu from 2004 were halted before reaching uncontrollable levels), the fact that such a flu strain can develop at all underscores the need for better vaccines.
Enter CEL-SCI. Its Ligand Epitope Antigen Presentation System, or L.E.A.P.S., platform has shown previous promise as a way to treat H1N1. And, since H1N1 is very similar to the currently-worrisome H7N9 strain of bird flu, CVM may well hold the key to making a viable, functional vaccine... and doing so quickly. Although it wouldn't be until next quarter - at the earliest - that an H7N9 vaccine would make a difference to CEL-CSI's income statement would benefit (and that's if it benefits at all), the mere possibility was enough to bump CVM out of a bearish rut and into a bullish one. Sometimes though, that's enough.
Regardless of the reason, the chart is showing us what we want to see. The stock popped above its 20-day and 50-day moving averages late last week, and though peeled back a little this week, the 50-day line (purple) is now acting as a support level. That's proof enough that traders are looking for reasons to keep the rally going. And with a company as well-known and well-liked as CEL-SCI Corporation, traders will almost assuredly find them. Let's take this admittedly-choppy reversal at face value, and trust that the H7N9-driven focus will give CVM some bullish traction for at least several days.
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