February 16, 2017 7:37am
There are dangers in dealing with an overbought market
Anyone who reads my posts, knows that I am about making money, no matter what happens in the sector
Today’s headlights: six (6) equities
Critical information ahead of “our” universe’s open! I provide intelligence and analysis for short and near-term investment.
Expectation will be the word for 2017 – meeting the unknowns with the soon to be exposed concerns will be the subject of investing decisions through this year 2017.
BUY: AGTC, BTX and MESO
SELL: CAPR, IMUC and SGMO,
Indexes and ETFs: The IWM (-0.19%) and the XBI (-o,16%) are DOWN and the IBB and XLV are NOT indicating
Dow futures are DOWN -0.15% and NASDAQ futures are DOWN -0.03%
U.S. stock index futures traded lower on Thursday as traders continued to digest comments from Fed Chair Yellen and eyed economic data.
European markets moved lower as investors paused for breath after fresh record closes on Wall Street in the previous session.
Asia markets traded mixed, despite U.S. stocks closing at fresh highs for a fifth-straight day overnight, with Toshiba shares extending their recent tumble.
Data docket: jobless claims, housing starts, building permits and the Philly Fed survey released at 8.30 a.m ET with the NY Fed Household debt report scheduled for 11 a.m ET.
The stem, cell, gene and regenerative therapy (SCG&RT) closed POSITIVE on Wednesday, Tuesday, Monday, Friday and last Thursday.
The SCG&RT sector’s record after the last 5 days (of 43 covered companies):
· Wednesday closed POSITIVE with 15 decliners, 25 advancers and 3 flats;
· Tuesday closed POSITIVE with 20 decliners, 21 advancers and 2 flats;
· Monday closed POSITIVE with 15 decliners, 24 advancers and 4 flats;
· Friday closed POSITIVE with 15 decliners, 24 advancers and 4 flats;
· Last Thursday closed POSITIVE with 11 decliners, 28 advancers and 4 flats;
Remembering Wednesday’s closing bell newsletter, “This rally has produced overbought conditions and other stresses in the sector.”
- Investors can see that the sector is changing as sentiment has picked or pecked many of the ‘usual suspects’. Volume and volatility have been increasing from low levels.
There are dangers in dealing with an overbought market — if you short it, you can get demolished by the continuing upward trend; if you don’t short it, you can get caught by a sudden downdraft.
- Could we be in line with a sharp drop? I haven’t seen any SELL signals but, then again - we never get those other than here!
In this environment, I would be careful in being TOO long …
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 up +1.78% and is NOT indicating in Thursday’s pre-market;
· The SPDR S&P Biotech ETF (XBI) closed Wednesday up +1.65% and is DOWN -0.16% in Thursday’s after-market;
· The Health Care Select Sector SPDR ETF (XLV) closed up +1.08% Wednesday and NOT indicating in Thursday’s pre-market;
· The iShares Russell 2000 (IWM) closed up +0.60% on Wednesday and is DOWN -0.19% in Thursday’s pre-market
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed DOWN -$0.05 to $7.15 after $7.20 (+$0.05) following Monday’s $7.15, Friday’s $7.30 and last Thursday’s $6.85 (+$0.45). AGTC reported FY Q2/17 profit of $2.1 M and $0.11 per share. The results exceeded street expectations. The average estimate was for earnings of $0.03 per share. AGTC posted revenue of $10.9 M in the period, which also beat street forecasts. Expectation was for $7.2 M. Also AGTC’s shares have decreased 32 % since the beginning of the year. The shares have dropped 51% in the last 12 months and should jump higher - Maintaining BUY;
BioTime (NYSEMKT: BTX) closed DOWN -$0.01 to $2.90 and is up or positive in the aftermarket +$0.14 after a successful offering which was priced at $2.70- BUY
Capricor (CAPR) closed UP +$0.16 to $3.15 with 145.1 K shares traded after Tuesday’s $2.98 (+$0.16) with 89.7 K shares traded <3 month average = 50 K>. Is the stock getting ahead of itself? February 6, the stock traded at $2.40, January 30/16 the stock traded at $2.18 as the year (January/3/17) started at $2.55. Any strength is usually sold into – Maintaining SELL
Mesoblast (MESO) closed UP +$0.06 to $6.16 after Tuesday’s $6.11 (+$0.16). A single intravenous infusion of Mesoblast's allogeneic "off-the-shelf" Mesenchymal Precursor Cells (MPCs) resulted in durable responses through nine months (39 weeks) in a 48-patient placebo-controlled, randomized P2 trial in rheumatoid arthritis (RA) patients resistant to anti-Tumor Necrosis Factor (TNF) agents was announced last night. The RA population resistant to anti-TNF agents constitutes about one-third of patients treated with these agents, is the fastest growing branded market segment within the $19 billion global RA biologics market, and is set to grow further as multiple anti-TNF biosimilars become available; the goal of therapy in these patients is to achieve early and sustained low disease activity which correlates with prevention of structural joint damage in RA. Given the serious nature of anti-TNF resistant RA, MPC-300-IV is well-positioned to be developed as a regenerative advanced therapy to target this major unmet medical need – BUY;
Sangamo Therapeutics (SGMO) closed UP +$0.15 to $4.20 with 781.5 K shares traded after Tuesday’s $4.05 (+$0.30) with 560.8 K shares traded <3 month average = 867.1 K shares>. Not a bad transition in six sessions, $4.20 from February 8’s $3.60. There is $0.60 in the profit pot after a 14.3% increase – traders might not resist this chance! – Maintaining 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.
