CytRx

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Another stock that insiders are warming up too here is CytRx ( CYTR), a biopharmaceutical research and development company engaged in the development of high-value human therapeutics, specializing in oncology. Insiders are buying this stock into some big-time strength since shares are up over 150% so far in 2012.

CytRx has a market cap of $104.95 million and an enterprise value of $70.85 million. This stock trades at a premium valuation, with a price-to-sales of 411.34 and a price-to-book of 7.12. Its estimated growth rate for this year is -74%, and for next year it's pegged at 13.4%. This is a cash-rich company, since the total cash position on its balance sheet is $31.98 million and its total debt is zero.

A beneficial owner just bought 44,824 shares, or about $230,000 worth of stock, at $4.90 per share.

>>5 Health Care Stocks Setting Up to Break Out

From a technical perspective, CYTR is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last two months, with shares soaring from $2.03 to a recent high of $5.44 a share. During that sharp run higher, shares of CYTR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed CYTR within range of triggering a near-term breakout trade.

If you're in the bull camp on CYTR, then I would look for long-biased trades once this stock breaks out above some near-term overhead resistance at $5.44 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 250,332 shares. If we get that action soon, then CYTR has a great chance of re-testing and possibly taking out its next major overhead resistance level at $6 a share. If $6 gets taken out with volume, then CYTR could hit $7 to $7.50 a share.

On the flipside, I would avoid CYTR or look for short-biased trades if it fails to trigger that breakout, and then drops back below some major near-term support at $4.40 a share with heavy volume. A high-volume move below $4.40 could set this stock up to re-test its 50-day moving average of $3.56 a share.

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