This Small Step From CytRx Isn't Small at All (CYTR)

Though worth keeping on your radar, until today, CytRx Corporation (NASDAQ:CYTR) wasn't actually a name worth taking a swing on. Today's action changed everything, for the better. Thanks to Wednesday's 6.0% pop, the CYTR tide has convincingly turned bullish. 

For those not familiar with the company, CYTR is the outfit working on a trio of cancer drugs... tamibarotene, bafetinib, and aldoxorubicin (formerly INNO-206). It's got nothing on the market yet, but aldoxorubicin for soft-tissue sarcoma has been approved for Phase 3 trials. The company's got a Phase 2 and a couple of Phase 2 trials also underway.

It's all compelling stuff, though the stock has been notoriously erratic of late, rallying on good news, but seeing that strength fade just as quickly. Despite all its gyrations in the meantime, CYTR is right back where it was at the end of 2011. Yet, the chart says the stock may finally be on the verge of breaking out of a long-term slump. Granted, you have to take a step back and really stare at a chart of CytRx Corporation to see the upside. The clues are in place, however.

The big one is the fact that the 200-day line moving average line (green) played a support role between late-July and earlier this week. And that was no easy task either. CYTR shares put a lot of pressure a lot of times on that floor, but the key 200-day line held up each time, and even managed to start sloping upward rather than downward during that time... a huge clue of the bigger momentum in itself.

Along those same lines, all of the shorter-term moving averages are now above the long-term 200-day line, telling us the trend has turned bullish in all the key timeframes necessary to make CytRx a reasonably safe long-term buy. Today's bullish pop is just the clincher for all of those other clues.

It's not just the daily chart telling us that CytRx Corporation is brewing up a bigger uptrend, however. The bigger weekly chart shows that this stock has just this week wiggled its way out of a long-term wedge shape... bullishly. After several months' worth of squeezing into a compressed shape, the chart's now starting to decompress. There's a lot more decompression to go than just today's move, however.

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The bottom line is, it may seem like we've seen this move from CYTR before, to no avail. It's different this time though. This time, it's starting the effort with much healthier support, and it's starting the effort without any more resistance lines poised to get on the way. Time to wade in.

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