One final under-$10 stock that's worth tracking at current levels is penny stock
(CYTR - Get Report)
, a biopharmaceutical research and development company engaged in the development of high-value human therapeutics, specializing in oncology. This stock has been hammered by the bears in 2011, with shares off by over 60%.
If you take a look at the chart for CytRx, you'll notice that this stock gapped down back in late July from over 60 cents to a low of 40.5 cents a share. After that gap down which occurred with huge volume, the stock continued to trend lower and recently hit a
of 27 cents in early October. Since that October low, the stock has started to change its trend to the upside and shares are now making higher lows and higher highs, which is bullish. Shares of CYTR are now approaching a major breakout if it can manage to move above some near-term overhead resistance levels.
Traders should watch CYTR for a breakout if it can take out 42.4 cents to 47 cents on high volume. Look for volume that's tracking in close to or above its three-month average volume of 784,608 shares. Volume on Thursday registered 850,000, with the stock closing up 1.2%. If we see a sustained move and close above those resistance prices soon, then this stock could easily explode and attempt to refill some of that gap down from July.
Traders should look to buy this stock once it breaks out over 42.4 cents with strong volume. I would simply use a mental stop just under the 50-day moving average of 35 cents. You could also anticipate the breakout and buy off any weakness and again use that same stop near 35 cents. I would add to any long position once this stock takes out 47 cents to 50 cents with volume, since those prior resistance levels are right near the gap down day high price.
To see more hot under-$10 stocks, including
, check out the
Stocks Under-$10 Setting Up To Trade Higher
portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.
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