December 1, 2016 8:12am

 

… An oversold tailwind should regenerate “some” value

 

Understanding the vagaries of sentiment

 

 

I answer one question; in which company should investors put, keep and commit their money!

Who is in today’s headlights – six (6) equities, are they a BUY or a SELL – subscribers know!

 

I write in every line that investors need to avoid risks as if I were the first to be hurt if I am wrong!

 

 

 

The sector is being driven by a missing theme - until we get some optimism, the path of least resistance is lower.

 

 

BUY: ADRO, AGTC, BLUE, BSTG and CLLS,

SELL: KOOL

 

Indexes and ETFs: The IBB is NOT indicating, while the XBI (+0.53%), XLV (+0.22%) and IWM (+0.23%) are UP 

Dow futures are DOWN -0.05% and NASDAQ futures are DOWN -0.20%

 

U.S. stock index futures pointed to a flat to lower open on Thursday as traders eyed oil, a batch of data and corporate earnings.

European markets were slightly lower as investors focused on political developments in Italy and key data releases after the oil-producing cartel OPEC agreed to cut production.

Asian markets were up as Japan's benchmark index rose more than 1% as regional manufacturing surveys led by China beat expectations and on upbeat views a day after OPEC reached its first deal since 2008 to cut oil production and Australia’s ASZ 200finished up 1.1% as Australia's business investment fell by 4% in Q3.

 

Data docket: initial claims are due at 8:30 a.m. ET and manufacturing PMI at 9:45 a.m. The ISM index and construction spending are set to come out at 10:00 a.m. ET, while vehicle sales are also due to be released on Thursday.

 

 

The stem, cell, gene and regenerative therapy (SCG&RT) sector closed NEGATIVE on Wednesday, Tuesday and Monday, POSITIVE on Friday; the market was closed last Thursday.

The SCG&RT sector’s record after the last 5 days (of 43 covered companies):

·         Wednesday closed NEGATIVE with 36 decliners, 7 advancers and 0 flat;

·         Tuesday closed NEGATIVE with 22 decliners, 16 advancers and 5 flats;

·         Monday closed NEGATIVE with 34 decliners, 7 advancers and 2 flats;

·         Friday closed POSITIVE with 15 decliners, 26 advancers and 2 flats;

·         Last Thursday, the market was CLOSED for Thanksgiving;

 

 

Remembering last night’s newsletter, “downside momentum blurs sustainable pricing … as speculation runs rampant.”

  • Reiterating, as I had stated “It is NOT an investment period as the last month of the year <December> approaches, if anything it’s all about momentum trading and that’s - dangerous.”

The sector needs some catalysts, anything would help … we have been stagnating in tight trading ranges — as advance/decline lines alternated.

  • We need some new highs to start the New Year,  the psychological value will be immense!

AS I have stated, sector breadth has been swinging back and forth - buy, then sell,  buy to sell and buy again.

 

 

You’ve made it to the office, turned on the monitor, having just gotten your coffee and it hits you - what could be today’s trades? 

Watch list:

·         The iShares Nasdaq Biotechnology (IBB) closed  Wednesday down -2.23% and is NOT indicating in Thursday’s pre-market;

·         The SPDR S&P Biotech ETF (XBI) closed Wednesday down -2.94% and is UP +0.70% in Thursday pre-market;

·         The Health Care Select Sector SPDR ETF (XLV) closed down -0.95% Wednesday and  is UP +0.16% in Thursday’s pre-market;

·         The iShares Russell 2000 (IWM) closed down -0.49% on Wednesday and is UP +0.14% in Thursday’s pre-market.

 

                                                                                   

Companies in my headlights:

Aduro Biotech (ADRO) closed DOWN -$1.00 to $11.40 folowing the past 5 sessions , $12.40 <Tuesday>  $12.60 <Monday>, Last Friday’s  $13.95 and the previous Wednesday’s  $13.95 having started November at $1.10.  the FDA lifted the partial clinical hold on trials for its LADD (live, attenuated double-deleted) immunotherapy platform. The lifting of the clinical hold will enable the company to resume patient enrollment in all Aduro-sponsored clinical studies, including one for its cancer vaccine CRS-207. ADRO now plans to commence a P2 clinical trial in the first half of 2017 using its LADD-based cancer therapy CRS-207 in combination with an anti-PD-1 compound to treat mesothelioma. Mesothelioma is a cancer of the tissue that lines the lungs. Purgatory only lasts so long to re-start the trial – BUY;

 

Applied Genetic Technologies (AGTC) closed DOWN -$0.30 to $9.20 following Tuesday’s $9.50, Monday’s $9.20, last Friday’s $9.90 and the previous Wednesday’s $9.85. Last week’s range of $9.60 to $10.055 compared to the previous week’s $7.05 to $9.85. Up, down, up, down – there is still $9.23 of cash in the per share pricing, solid revenue, a quarterly net income and a solid partner – Biogen (BIIB), what more does an investor need – Maintaining BUY;

 

Biostage (BSTG) closed UP +$0.01 to a wholesome $0.80. Its Cellspan™ Esophageal Implant was granted Orphan Drug Designation by the U.S. FDA to restore the structure and function of the esophagus subsequent to esophageal damage due to cancer, injury or congenital abnormalities. Helpful in the long-term but, the financing “Sword of Damocles” still hangs over its head with the NASDAQ listing issue put off for the ususal 180 days – a tough slog for shareholders as tax selling season begins and the reality of the share pricing could be determined. For today, because of news  - BUY ;

 

bluebird bio (BLUE) closed DOWN -$4.05 to $60.35. Two patients with advanced multiple myeloma, a type of blood cancer affecting plasma cells, have been put into stringent complete remission ongoing for four and six months. Another five patients treated with the same BLUE therapy, known as BB2121, had a "very good partial response". None of the patients experienced severe immune-related or neurological safety issues from BB2121. BLUE is developing BB2121, a type of chimeric antigen receptor T-cell, or CAR-T, in partnership with Celgene (CELG). The new data from a PI study are the first look at BB2121's performance in multiple myeloma patients no longer responding to multiple lines of prior drugs.  Barring any problems and assuming an optimal dose is found, BLUE believes it can advance BB2121 directly into a pivotal clinical trial, which if successful, could lead to marketing approval. Under BLUE’s collaboration agreement, Celgene (CLGN) would take over development of BB2121 and conduct the pivotal study – BUY;

 

Cellectis SA (CLLS) closed DOWN -$0.76 to $16.86. It hasn’t been a good November, as share pricing has tripped, fallen and rebounded to fall yet again. November opened at $17.80, fell to $16.56 (11/8), jumped to $19.70 (11/16), fell to $17.41 (11/23) leaping to $18.05 on 11/25 – inconsistent with weak sentiment. Thus, I consider CLLS as oversold just by the fact of its bottom dragging – BUY;

 

Cesca Therapeutics (KOOL) closed UP +$0.24 to $3.13 following Tuesday’s $2.89 and Monday’s $2.93, last Friday’s $3.06 and the previous Wednesday’s $2.96. KOOL never seems to hold its value – roll out – SELL;

 

 

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.

Henry’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your advisor about what is best for you.