What do Acura Pharmaceuticals, Inc. (NASDAQ:ACUR) and CytRx Corporation (NASDAQ:CYTR) have in common? Yes, they're both biotech stocks, though that's not the most relevant answer right now. The best answer regarding the commonality between CYTR and ACUR at this point is that both are actionable, even of for totally different reasons/totally different directions. A closer look at each is merited.
If the name CytRx Corporation seems vaguely familiar, it may be because yours truly penned some bullish thoughts on the biotech stock just a few days ago, on December 29th. While my expectations proved to be right - CYTR is up 31% since our first look and up 23% for the day - they proved to be right far faster and far more volatile than I expected. Beggars can't be choosers, however, and we have to play the hand we've been dealt rather than the one we wish we were dealt.
In other words, if you waded into CytRx Corporation on my advice from last week, now get out. CYTR looks like it's gone about as far as it can go for a while, and better to lock in what you can while you can rather than deal with a substantial (gap-closing) pullback that may or may not set up another wave of bullishness anytime soon.
Instead, you may want to take those proceeds and use them to take a swing on Acura Pharmaceuticals, Inc.
At first glance, ACUR doesn't look like it's ready to do anything especially noteworthy. A closer inspection of this chart, however, shows us this stock has done something meaningful that it hasn't done in months... move above the 50-day moving average line (purple). And it wasn't from lack of trying. Acura Pharmaceuticals has tested the 50-day line several times since July, and failed to hurdle it each time until yesterday, when it pushed above it on huge volume. Between the volume and the move above some key technical resistance, the game has been changed - Monday looks like a pivot point.
For those not familiar with it, Acura Pharmaceuticals is the developer of a so-called Aversion Technology drug delivery platform that prevents prescription drug abuse by putting painkillers like hydrocodone and oxycodone into a controlled release formula and format that can't be snorted, swallowed, or "shot up."
The stock's been all over the map since 2008, as has the company's perceive future. But, ACUR has just hot what's likely to be a cyclical low.
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