One You Want, Two You Don't: POL, ANX, and ATHX Under the Microscope
Contrary to popular belief, the Santa Claus rally isn't a friend to each and every stock. It's just a friend to some. Which of these groups do ADVENTRX Pharmaceuticals, Inc. (AMEX:ANX), Athersys, Inc. (NASDAQ:ATHX), and PolyOne Corporation (NYSE:POL) fall into? Take a look. 
Trading, like life, can be kind of funny sometimes. Just when it starts to look like something is a certain way - perhaps decidedly so - a curve ball is thrown. On the surface it looks like PolyOne Corporation is nothing but a red-hot company with the growth and results to back up the meteoric rise in its shares. Yet, for many trading veterans, POL is a screaming sell right now simply because it's about as perfect as a stock can be.
Seriously.
For starters, the company is growing through acquisitions, buying Spartech in November, and announcing the acquisition of Glasforms just today. It's also got a top technology, with its Therma-Tech material proving to be a viable alternative to aluminum, and some other metals. The forward-looking P/E of 14.6 doesn't seem like a hefty price to pay either, even though POL shares have jumped more than 50% over the past six months. So what's the risk with PolyOne Corporation? It's the "as hood as it gets" syndrome, where the best-case scenario has been fully baked in (and perhaps more than baked in) to the stock's price. Indeed, given the premium that PolyOne paid for Glasforms and Spartech, shareholders may be disappointed by the ROI that POL ends up squeezing out of those acquisitions, the smart money may already be looking for the door now that the honeymoon phase is over. 
It's happened so slowly and subtly, odds are you haven't even noticed. But, when you stop and make a point of looking for it, right there it is - ADVENTRX Pharmaceuticals, Inc. has slipped under the last of key technical support levels, and is starting to accelerate into new multi-week low territory. It's unlikely ANX will be able to stop the slide now, considering it's spent the last few weeks developing it.
It's all represented on the nearby chart. Going all the way back to July [though the chart doesn't show that much time], ANX has found last-ditch support at $0.57 and $0.58. Over last week and today, however, the stock has slowly grinded below those floors, on rising volume to boot. Given that this key breakdown materialized just a few days following the move under all of its key moving average lines, we can take this bearish clue from ADVENTRX Pharmaceuticals at face value.
If you're looking for a place to park that money that would have otherwise gone to (or stayed in) ADVENTRX Pharmaceuticals or PolyOne Corporation, then Athersys, Inc. is a name to look at. Though it doesn't appear to be making any net progress following October's plunge, a closer look reveals that, yes, ATHX may be pulling itself out of its funk as of today.
The string of higher lows is the first clue, though the big bullish sign for ATHX is the fact that for the second day in a row it's poised to close above its 50-day moving average line. That's a big deal, as the 20-day average was the prod for a bearish reversal back on the 4th. If nothing else, the fact that Athersys shares are still oversold following October's selloff is acting as a magnet back toward its longer-term 100-day and 200-day moving averages. 
Bryan Murphy is a paid contributor of the SmallCap Network. Bryan Murphy's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.
Do NOT buy or sell ANX, POL or ATHX until you have read everything.
SmallCap Network provides comprehensive research and opinions on ANX, POL and ATHX. |
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| Date: | May 20, 2013 | |
| Price: | Free | |
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