Stocks on the Brink: THO, RNWK, CGYV, CVM

A lot of stocks have been moving lately, up as well as down. A handful of names that are of particular interest to us, however, have been content to simply bide their time of late. That could be about to change though, for RealNetworks Inc. (RNWK), CEL-SCI Corp. (CVM), China Energy Recovery, Inc. (CGYV), and Thor Industries Inc. (THO). Traders may want to take a closer look at these stocks 'on the brink', since each is a budding opportunity.

Some investors may have already decided to put China Energy Recovery, Inc. (CGYV) on the shelf after a disappointing Q1, at least judging from the CGYV chart. The company did $1.2 million in revenues in the first quarter, and took a $1.5 million loss. It was a drastic change from the prior eight quarters of growth.

It was also a one-time problem... China Energy Recovery did $7.5 million in revs, and created $.03 in EPS during the second quarter. That's on par with the numbers the company was doing - and growing - for the last three years.

Still, the market just wasn't interested in CGYV, perhaps until now.

Take a look at what's been happening the last two weeks - we've seen tons of volume, yet no movement. This is likely to be a metaphorical 'changing of the guard', as would-be sellers are piling out, but are being met (dollar for dollar, buyer for seller) around the $1.20 to $1.30 level.

Based on this kind of activity, China Energy Recovery, Inc. shares make for an attractive rebound candidate; the company is supporting the effort with real news.

CEL-SCI Corp. (CVM) is on a slightly different brink than China Energy Recovery is. CEL-SCI has already tested a key resistance level around $0.70, and in so doing has toyed with new 52-week highs. The question is, can CVM hold on long enough to stay at or above that ceiling?

The daily chart below had to be squeezed enough to show all the way back to early last year, to offer the full effect. Between March and June of 2008, CEL-SCI Corp. shares were perfectly content to move sideways, held down at the 70 cent area. As time rolled on and the bear market took hold, CVM drifted lower - into the realm of the forgotten.

Finally in May (thanks to swine flu and a renewed interest in cancer vaccines), biotech's broad strength and CEL-SCI's specific strength was good enough to make another attempt at cracking the 70 cent area. It worked... for about a day.

Last week was yet another attempt, and this one looks like the best so far for the stock. Not that CVM has blown right past it without looking back, but we're not seeing a precipitous pullback from CEL-SCI Corp. shares yet like we did the last time. Given the volume we've seen on the buy side - and the limited volume from the sell side - this may well get the stock over the $0.70 hump once and for all.


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Thor Industries Inc. (THO) is the only short (bearish) trade on the brink today. We initiated the trade back on the 25th because the stock was overbought, and starting to pull back. The fact that the THO shares had rallied far more than the company's fundamental justified was just a little icing on the cake.

The key to the Thor Industries trade was breaking the support at $25.50. Well, guess what.... the $25.50 mark still hasn't been cracked yet. It is getting closer though. On Monday, the low of $25.63 pointed THO in that direction - lower - for the third time in two weeks. The bulls seem to be able to do little to get the stock out of the danger zone.

In the meantime, we've heard that Thor Industries and lenders have formed a common plan to generate some activity in the RV market by offering discounts. That will certainly help on the cash flow front, but can't be good for margins. Moreover, it doesn't exactly scream that all is well on the RV front.... like we said.
 
Bottom line? THO is still more of a liability than an asset at these lofty levels. Once support cracks, there's nowhere to hide.

And finally, RealNetworks Inc. (RNWK) may be on the brink of a real breakout as well.

When we last updated this trade on the 25th, the expectation was that RNWK would simply act as it has the last several times that upper resistance line had been met - the stock would just fall back to the support line and start the ebb/flow process over again. Being wrong about the RealNetworks chart, however, could prove very profitable.

Rather than holding RNWK down, the stock hurdled that ceiling, and has since found support there after a modest pullback.

With the range boundaries broken, RealNetworks shares should have a much easier time getting going, and staying going. Keep in mind that it's just a trade though. The company has been burdened by pretty consistent operating losses (even beyond any one-time charges), and without any clear picture about when the company might get back in the black, RNWK is nothing you'd want to get married to.


If you'd like to know when or if we issue trading alerts specifically for THO, RNWK, CVM, or CGYV, then be sure to subscribe to our free e-newsletter. It's delivered two to three times per week.