April 26, 2017 8:30am

 

The cell therapy sector is overbought, but there are no sell signals – yet!

 

Mixed open expected ...

 

Resistance has been overcome yet support is still awaited

 

Pre-open indications:  seven (7) – 4 SELLS, 3 BUYS – portfolio safety and upside are my theme even if it means leaving money on the table

 

Critical information ahead of “our” universe’s open! I provide intelligence and analysis for short and near-term investment.

 

Readership is a team sport, are you on it?

 


 

Expectation is the word for 2017 – meeting the unknowns with the soon to be exposed concerns will be the subject of investing decisions throughout this year.

 

 

Dow futures are DOWN -0.05% and NASDAQ futures are UP +0.02%

 

U.S. stock index futures pointed to a mixed open on Wednesday as traders await a much-anticipated tax plan from the White House.

European markets hovered around the flatline as the "Macron rally" seen earlier this week faded and investors focused on earnings, monetary policy and a tax announcement in the U.S.

Asian indexes traded higher, following the rise in U.S. indexes overnight on the back of strong earnings announcements and on expectations for U.S. President Donald Trump's impending tax reforms.

 

Data docket: there were no major economic data reports

 

 

The cell therapy sector closed POSITIVE on Tuesday and Monday, NEGATIVE on Friday, POSITIVE on Thursday and last Wednesday.

The cell therapy sector’s record after the last 5 days (of 43 covered companies):

·         Tuesday closed POSITIVE with 11 decliners, 28 advancers and 4 flats;

·         Monday closed POSITIVE with 10 decliners, 32 advancers and 1 flat;

·         Friday closed NEGATIVE with 35 decliners, 5 advancers and 3 flats;

·         Thursday closed POSITIVE with 14 decliners, 27 advancers and 2 flats;

·         Last Wednesday closed POSITIVE with 9 decliners, 29 advancers and 5 flats;

 

 

Remembering Tuesday’s closing bell newsletter, “Cell therapy equities are carrying more downside risk than upside safety at this point in time and I’m worried.”

  • Reiterating, “ As traders cover their short positions, what are algorithms relying on and ETFs adjusting exposure to – the oversold or overbought?”

As I also stated, “The sector’s financial results a.k.a. earnings or LPS <loss per share> announcements have yet to start and when they do their impact will be felt.”

  • What did I see on Tuesday, the DOW was up +1.12% versus Monday’s +1.05% and NASDAQ was up +0.70% versus Monday’s +1.24% and volatility traded near 10.8 as compared to Monday’s  10.9  with the sector.

 

The sector’s  volume was still low on Tuesday as compared to Monday – a selling into strength target or not but, I am a betting man:

Volume standouts versus 3 month averages:

•   uniQure (QURE),

•   Cellectis SA (CLLS),

•   Applied Genetic Technologies (AGTC),

•   Opexa (OPXA),

•   Regenxbio (RGNX),

•   BioTime (NYSEMKT: BTX),

•   AxoGen (AXGN),

•   Asterias Biotherapeutics (NYSEMKT: AST),

•   Sangamo (SGMO),

•   MiMedx (MDXG),

•   Northwest Bio (NWBO),

 

What else did I see: Tuesday’s ranges –gainers overwhelmed the decliners while there was a much lower range in the decliers compared to the gainers:

… Decliners ranged from -0.48% <FCSC> to -9.20% <NWBO> in 11 equities;

… Gainers ranged from +0.41% <BSTG> to +10.47% <SGMO> in 28 equities;

 

I believe that short covering enhanced Tuesday’s upside … we need to refocus on fundamentals.

As I had stated, I was prepared to leave money on the table – sentiment might be strong for one day, but fragile short-term in my estimate!

 

Despite indicators remaining with buy signals. I digress ,,, as cell therapy stocksare missing sell signals for the overbought situation.

  • Since one of my reliance factors is the advance/decline line – thay have stayed at a high for the second session in a row and a fourth time in five sessions.

Volatility   has remained at low levels. As long as that is the case, stocks can rise. The VIX only becomes problematic for stocks when it begins to trend higher.

  • Even so, the levels to which some of these indices have sunk is now beginning to look a little worrisome to me.

Considering the overbought conditions and the <I believe> tretched sector, any swift correction could be in the making by Friday.

 

There is a danger in an overbought sectpr — if you short it, you can get demolished by the continuing upward trend; if you don’t short it, you can get caught by that sudden downdraft.

 

 

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  Tuesday up +1.31% and was NOT indicating  in Wednesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Tuesday up +2.05% and was up +0.01% in Wednesday pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed up +0.43% Tuesday and is NOT indicating  in Wednesday’s pre-open;
  • The iShares Russell 2000 (IWM) closed up +0.97% on Tuesday and was DOWN -0.17% Wednesday’s pre-open

 

 

Companies in my headlights - There is NO market timing but there are indications to consider!

Asterias Biotherapeutics (NYSEMKT: AST) closed up +$0.35 to $3.75 following Monday’s $3.40 (+$0.30). April ranged from $2.85 to $3.25 <excepting Monday>, AST announced P2 results that demonstrated the potential of AST-VAC2 allogeneic (non-patient specific) dendritic cell cancer vaccine to achieve promising results in its upcoming P1/2a study in non-small cell lung cancer and to potentially be developed for the treatment of other types of cancer - BUY;

bluebird bio (BLUE) closed up +$2.10 to $87.75 after Monday’s $85.65 (+$3.25). Traders always get “antsy” when BLUE pops, do they stay or do they go – safety  calls the shot even if <I am> early but, I don’t see any sell signals. The pre-market indication is still positive +$0.80 or +0.93% to $86.45 – SELL to BUY;

Capricor (CAPR) closed up +$0.14 to $3.23 following Monday’s $3.09 (+$0.08) and is down in the pre-market -$0.03 or -0.93% to $3.20. Tuesday’s CAPR had announced top-line results from a safety and exploratory efficacy analysis of six-month data from the randomized 12-month P1/2 HOPE Clinical Trial of CAP-1002 (allogeneic cardiosphere-derived cells)- key word … an investigational candidate for the treatment of patients with Duchenne muscular dystrophy, or DMD. Overbought– BUY to SELL;

Cellectis SA (CLLS) closed up +$0.26 to $23.57 following Monday’s  $23.31 (+$0.66)  following Friday’s $22.65 after Thursday’s $23.00 ($0.87). I am NOT a “stayer”  as traders usually drain the well – Maintaining SELL;

Juno Therapeutics (JUNO) closed up +$0.13 to $24.95 following Monday’s  $24.82 (+$1.03). April ranged from $22.24 to $24.95. JUNO closed Friday  at $23.79 (-$1.16) after Thursday’s  $24.95 (+$0.34) after Wednesday’s $24.61 (+$0.78) following last Tuesday’s $23.83. April 13th the stock was $24.01, April 4th, the stock was $23.05 following March 24’s $20.20. The aftermarket indication is a positive +$0.44 or +1.76.  SELL to BUY;

Mesoblast (MESO) closed up +$0.20 to $11.78 following Monday’s $11.58 (+$0.38). A new high, as April ranged form $8.94 to $11.61 <excluding Monday>. Overbought – BUY to SELL;

Spark Therapeutics (ONCE) closed up +$2.08 to $56.92 following Monday’s $54.84 ($2.34). April ranged from $49.66 to $54.12. ONCE closed Friday at $52,50 (-$1.62) after Thursday’s $54.12 (+$1.17) on low volume <99.9 K versus the month average of 294 K shares> following Wednesday’s $52.95 (-$0.02) after last Tuesday’s $52.97 (-$0.74). 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.