During Friday's "Lightning Round" segment of Mad Money, one caller asked Jim Cramer about the biotech firm CEL-SCI Corp (CVM) : "I think this one is good," responded Cramer. This biotechnology company is involved in the research and development of immunotherapy products for the treatment of cancer, autoimmune and infectious diseases.
Let's check out the charts and indicators as the fundamentals are above my pay grade.
In this daily bar chart of CVM, below, we can see that prices traded sideways in the $18-$12 area from late April to late January before exploding on the upside. Prices soared sharply to around $40 in a few days and since then prices have been slowly declining back to the breakout level or the top end of the consolidation pattern.
Prices are testing the rising 50-day moving average line and the positive 200-day moving average line intersects around $14. The trading volume surged in late January and early February but has since calmed down.
The On-Balance-Volume (OBV) line declined until late December but then turned up into the middle of February. The weakness in the OBV line since the middle of February seems to be some light liquidation or profit taking.
The Moving Average Convergence Divergence (MACD) oscillator has made a round trip from the zero line.
In this weekly Japanese candlestick chart of CVM, below, we can see two large upper shadows above $25 telling us that traders rejected those prices. The rising 40-week moving average line intersects down around $15 and could well be tested in the days or weeks ahead.
The OBV line shows us a three-year rise and that is pretty constructive. The MACD oscillator turned sharply higher in January but is already narrowing.
In this Point and Figure chart of CVM, below, we used daily price data and we can see a potential upside price target in the $24 area.
In this second Point and Figure chart of CVM, below, we used weekly price data. Here the chart suggests the $10 area as a price target.
Bottom line strategy: The daily bar chart of CVM looks like the recent rally in prices "happened overnight" but the weekly chart shows prices trending higher over the past three years. Big difference. The daily Point and Figure chart is bullish but the weekly chart is bearish. Confusing isn't it? I think the best course of action is for CVM to form a big base.
