Yes, CEL-SCI Has Found a New Groove (CVM)

To say that 2014 has been a good year so far for CEL-SCI Corporation (NYSEMKT:CVM) would be an understatement. It's been a great year for the company, and more specifically, its shareholders. CVM is up 96% year-to-date, cutting into a big chunk of the loss that was suffered in 2013. And, though a near-doubling in less than a month would normally be an invitation to a painful wave of profit-taking, in the case of CEL-SCI, the situation says this is one of those rallies that could get hotter the hotter it gets.

If the name rings a bell, it may be because CVM was one of the SmallCap Network's featured stocks - off and on - over the course of 2006, 2007, and part of 2008. There's no need to go into all the details of why we liked it so much for so long. Let's just suffice it to say the fact that CEL-SCI Corporation was on the verge of carrying its flagship development, head and neck cancer drug Multikine, from Phase 2 to Phase 3 was a pretty exciting time for the company as well as shareholders, and we wanted to reap whatever we could from the opportunity (especially knowing that any drug that makes it to Phase 3 trials has extremely strong odds of a final approval.

The market is fickle, of course, and quick to lose interest. CVM, without any major milestones to tout until it got close to the end of Phase 3 testing, found it tough to keep traders interested. The stock flamed out as a result, leading to (through no fault of the company's) a disappointing performance from CEL-SCI shares between 2009 and 2013.

As they say though, nothing lasts forever, and expect it when you least expect it.

If the chart's clues are any indication, the tide just turned in favor of CVM owners again.... and not in just a short-term, superficial way either. We're talking paradigm shift here. After getting whacked on October and falling to a low of around $0.80 for a couple of months - and then drifting to a low of $0.53 in December - it would have been easy for an investor to put CEL-SCI Corporation on the shelf forever. And, some traders did just that. Big mistake. As was said already, investors should know that nothing lasts forever, and we should expect things when we least expect them.

Since the end of December, CVM has blasted past a couple of key short-term moving average lines, and as of today has cleared the 100-day moving average line for the first time (barring one unusual and short-lived surge in August) in almost a year. And, there's something distinctly different about this crossover - it's happened on the heels of a string of higher and higher volume. It's the first time we've seen any real volume or any real volume growth behind a rally effort. We can take the change at face value, and say the undertow has finally shifted in a favorable direction.

It's not a purely technical trade, however. Though the fundamentals the market chooses to focus on tends to reflect and jive with the chart's current direction, one actually fuels the other. So, it's no surprise to see that the media's rhetoric has turned bullish. Thing is, not only will that bullish chatter spur the stock higher, the higher the stock moves, the more bullish the rhetoric becomes. And, given that the company's underlying technology is still just as solid today as we knew it was five years ago, the market should have little problem falling in love with CEL-SCI Corporation again.

Bottom line? Don't overthink things. CEL-SCI is a company with a lot going for it, and with a market cap of only $56 million versus a head and neck cancer market that's worth an estimated $3 billion (globally) - with the end of Phase 3 trials in sight - CVM may have only begun to rally.

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