Out With That, In With This (RNN, GTXI)

If you were lucky enough to step into Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN) when your truly suggested it was a budding buy back on December 23rd, then congratulations - you're now up a little more than 60% (assuming you bought into RNN after the break above a key resistance line on the 27th). Now get out. Instead, use your profits from the Rexahn to take on a stake in GTx, Inc. (NASDAQ:GTXI). No, GTXI may not look like much at first, but when you take a step back and look at a chart of GTx, Inc. through a longer-term lens, the upside potential becomes clear.

Odds are good that suggesting Rexahn Pharmaceuticals, Inc. will ruffle some feathers. After all, RNN is one of the market's newest favorite stocks, and has been absolutely on fire of late. Putting the buy label on GTx won't be quite as controversial, as it doesn't look like I'm bailing out right in the middle of a rally. On the other hand, GTXI has been so anemic of late, it would be easy to question my call. All I can say about both suggestions is, hear me out.

Yes, Rexahn Pharmaceuticals Inc. is right in the middle of a red-hot rally. I get it. But, between yesterday's bullish gap and today's even-stronger open, there's just not much meat left on the bone. The stock's doubled in value since the end of November, and yesterday's high-volume surge from RNN has all the markings of a blowoff top... or a reverse capitulation. Yeah, the stock's up a little more today, but that looks like the last of the buyers who regret missing yesterday's pop and are still clamoring to get in. That's not the kind of mentality you want behind a rally, especially one that's this overbought.

In other words, this is as good as it's probably going to get for Rexahn.

And what makes GTx, Inc. so great? After all, this chart hasn't really gone anywhere in months following August's plunge. Well, take a closer look. As of yesterday - and using the 20-day and 50-day moving average lines as the springboard - GTXI has pushed its way above a recently-developed ceiling at $1.86. Better still, that breakout move unfurled on decidedly higher volume... the second high-volume rally we've seen from GTx in less than a month.

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Remember, this stock was trading around $4.00 before the huge bearish gap to less than $2.00 in August, so even if for no other reason than technical mechanics, there's a lot of upward/bullish pressure being applied to GTXI. If it can move above $2.00 here (which has also been something of a resistance level), that could really light a fire for GTx Inc.

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