Call it a hunch (because that's all it is), but I think Cardium Therapeutics Inc. (NYSEMKT:CXM) at least belongs on your watchlist, if not already in your portfolio. CXM shares have dropped a handful of key hints that say the bulls are just one good nudge away from catapulting this stock upward.
For those not familiar, CXM is a biotech stock. Specifically, Cardium Therapeutics is a modestly-diversified biotherapy developer with a hand in prostate cancer (as an insurer), health supplements (via its 'To Go' brand), a tissue engineering and wound/ulcer repair technology called Excellagen, and a cardiac drug Generx (Ad5FGF-4) that combats heart disease... atherosclerotic plaque to be specific.
The variety of its revenue bearing products - current and future - makes it tough to evaluate CXM from an investment standpoint. But, that doesn't mean one has to steer clear of the stock. It simply means that anyone interested in trading Cardium Therapeutics has to pay as much attention to the chart as anything else, since the chart is an indication of the market's ever-changing opinion of the stock. Thing is, the way opinions change are fairly predictable, meaning the subtle clues a chart drops over time may well tell you what's in store next for a particular chart.
Fast forward to today. Though Cardium Therapeutics Inc. has already given us a few bullish hints over the past month or so, it clinched that bullish effort today.
The clues started to materialize back in mid-August, with a long-tailed hammer-shaped bar. Long-tailed hammer-shaped bars often suggest the transition from a bear trend to a net-bullish environment, and considering the big plunge that CXM shares had made during the two weeks leading up to the hammer-shaper reversal effort, the odds were very good that this bar was the bottom. It would just take nearly a month to confirm that hint.
At the same time, a floor at $0.69 developed the day after the deep-low bar was made on August 16th. The fact that the bulls held the line there after making the reversal effort also speaks volumes, and gave the bulls a chance to regroup.
That effort finally came to a head today, with the bulls using the line at $0.69 to push up and off of and break above the 50-day moving average line (purple) at $0.91. It's the first time since February we've been above the 50-day line, so clearly this is a significant paradigm shift.
Putting it all together, you can only come to one conclusion... Cardium Therapeutics is in breakout mode. Bear in mind it could take a few days - and a few small pullbacks - to really set up a good base above the 50-day moving average line from which to stage the next leg of the rally. As long as it doesn't slide back under the $0.69 level, however, the tide should remain bullish enough to use that dip as a buying opportunity.
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