What would you do with an extra $1000? Maybe go away for a long weekend? Perhaps something of a shopping spree? Those are two reasonable choices. After all, it's not like thousand bucks is a life-changing amount of money - it's just enough to make some waves. If it were me (assuming I didn't need a long weekend at the time), I might take a swing on Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN). Granted, I'm a financial journalist and trader, so I think in investment terms anyway, and have access to plenty of market data. Even if I was only occasionally and remotely involved in the stock market though, I still think RNN would compel me here.
For those not familiar with it, RNN is a biotech developer with a handful of therapies in the pipeline. It's best known, however, for the drug that's farthest along in the development process.... Archexin, which has completed Phase 2 trials as a therapy for pancreatic cancer. The drug is also at the onset of Phase 2a testing as a therapy for solid tumors and malignancies. It's still going to be a while (as in years) before Rexahn Pharmaceuticals is in a position to drive any revenue, but veteran biotech traders can attest to the fact that revenue is secondary - the efficacy of a drug is what drives shares of young biopharma companies.
The nature of Archexin is still novel. It's an Akt-1 inhibitor, which other biopharma names have tinkered with, but found little success. Somehow, Rexahn has shown efficacy with the drug as a treatment for pancreatic cancer when used in conjunction with chemotherapy agent Gemzar. In fact, it nearly doubled the success (survival) of Gemzar. Merck and Keryx have tinkered with the Akt-1 inhibitor approach before, but without success. Though others are still dancing with the idea, it's not hyperbole to say that RNN is the name to catch in this particular line of cancer-fighting biotechnologies.
It's not the science, however, that got my attention today. It's the chart. Though RNN has been building up some bullish steam since late last month, it didn't become clear until today just how much conviction the bulls had here. Using some key short-term and intermediate-term moving averages as a pushoff point, Rexahn Pharmaceuticals has put some distance between itself and the key 200-day moving average line (green). It's also done so on huge volume, which was the missing ingredient with prior bullish surges. This is the most traction we've seen from the stock in well over a year, and there's still plenty of room for it to keep rising.
Just for the record, I think RNN is a little overbought in the short run, so I expect to see a pullback to the lower $0.40's before the rally is kick-started again. The bulls have spoken though, in a longer-term voice. This may be one of the better ways to play the game during what's apt to be a lethargic summer for the broad market. Just wait for the dip.
And as a reminder, this is a "fun money" trade idea, and not the kind of thing you'd want to bet your serious (retirement) money on.
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