STOCK TRADE: Buy CYTX at market price (approx. $3.28), good for the day. Place a protective stop-loss at $1.80 and a pre-determined sell at $6.00.
by Ian Harvey
February 25, 2014
Cytori Therapeutics Inc. (USA) (NASDAQ: CYTX), a cell therapy company, engages in developing cell therapies based on autologous adipose-derived regenerative cells to treat cardiovascular diseases and other medical conditions, is poised to blast upwards – similar to previous years.
From a technical perspective, CYTX exploded higher here right off its 50-day moving average of $2.66 with above-average volume. This move pushed shares of CYTX into breakout territory, since the stock took out some near-term overhead resistance at $2.76. Shares of CYTX are now quickly moving within range of triggering an even bigger breakout trade.
Cytori Therapeutics, Inc. develops cell therapies based on autologous adipose-derived stem and regenerative cells (ADRCs) to treat cardiovascular disease and repair soft tissue defects. The advanced therapeutic application in the Company's clinical pipeline is for cardiovascular disease.
The Company’s products include Celbrush, Puregraft, and Cytori LipoBank. The Celbrush is available in the 10 milliliter and 3 milliliter sizes and is used in conjunction with a Soft-Ject Syringe in the corresponding size.
The Puregraft System is developed for autologous fat grafting and aesthetic body contouring. The Puregraft System is available in two sizes: 250 milliliter, which processes 50-250 milliliter of tissue, and 850 milliliter, which processes 200-850 milliliter of tissue.
The Cytori LipoBank is a GTP-compliant cryopreservation system that offers a long-term storage option for viable adipose tissue after a single liposuction.
|Current P/E Ratio (ttm)||-|
|Relative P/E vs. SPX||-|
|Earnings Per Share (USD) (ttm)||-0.4089|
|Est. EPS (USD) (12/2013)||-0.3670|
|Est. PEG Ratio||-|
|Market Cap (M USD)||220.65|
|Shares Outstanding (M)||67.27|
|30 Day Average Volume||513,223|
|Dividend Indicated Gross Yield||-%|
|5 Year Dividend Growth||-|
|Next Earnings Announcement||03/07/2014|
Cytori Therapeutics has a one year low of $2.00 and a one year high of $3.93. The stock’s 50-day moving average is $2.6 and its 200-day moving average is $2.49. The company’s market cap is $207.9 million.
The market-centric term "periods of low volatility are followed by periods of high volatility, and vice versa" certainly comes into play here. And this continually applies to Cytori Therapeutics Inc. as has been proven time and time again... bullishly.
As proof of high volatility following low volatility, take the late-2011 convergence of all the key moving average lines of CYTX (all these lines could only intercept one another if the stuck was stuck in a narrow price range for several weeks). Sure enough, right as all those moving average lines converged, Cytori Therapeutics Inc. shares rallied out of that compression.
The same thing happened again in mid-2012.
And, we saw the same thing happen just a few weeks ago... all the key moving average lines converged, and that ended up acting as a springboard for the current rally.
Therefore this rally may last much longer and go much farther than prior ones have as this one started from different circumstances.
When we zoom out to a longer-term chart of CYTX, we can see that this current rally ultimately started when shares pushed up and off of a support line that extends all the way back to the lows from late-2011. And, as of December of last year, Cytori has moved above a key falling resistance line that extends back to mid-2011. In other words, this effort has been more than two years in the making. Now that the ball's rolling, it's unlikely the bulls are going to give up now.
Zacks downgraded shares of Cytori Therapeutics from an outperform rating to a neutral rating in a report issued on Wednesday, 19th February. They currently have $3.40 target price on the stock.
However, on the Dec 24th, 2013, Cytori Therapeutics was upgraded by analysts at Zacks from a neutral rating to an outperform rating.
Previously they had a price target of $2.80, but now, even after the downgrade, the price target has increased. The consensus of the analysts covering CYTX is now $10.00.
If a further breakout triggers soon, then CYTX will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $3.93. From there it should follow the paths set in previous years.
Therefore, based on the facts above the following stock trade is recommended…..
**STOCK TRADE: Buy CYTX at market price (approx. $3.28), good for the day. Place a protective stop-loss at $1.80 and a pre-determined sell at $6.00.