January 16, 2018 7:28am
The IBB (+0.25), XBI (+0.42%) and the IWM (+0.46) are indicating a POSITIVE upside while XLV is NOT indicating in Tuesday’s pre-open;
Makes for a pretty forecast
After last week’s new highs, old lows, weak trading ranges and erratic volumes; Tuesday could be an example of following the lead and fueling gains
Pre-open indications: 6 SELLs and 1 BUY
HIGHER open expected
Dow futures are UP +0.89% (+230 points) and NASDAQ futures are UP +0.63% (+43 points)
U.S. stock index futures were up sharply ahead of Tuesday's open following the long holiday weekend.
European stocks were higher after corporate trading updates boosted sentiment.
Asian markets closed higher as the dollar nursed overnight losses. Greater China markets, which had slid in the last session, edged higher.
Issues that will affect the trading day: the Dow is set to open up nearly 250 points, topping the 26,000 milestone. U.S. stocks have been rallying on the back of a stronger U.S. economy, tax reform, and optimism heading into earnings season.
Data docket: the latest Empire State Manufacturing survey is set to report at 8:30 a.m. ET.
Issues on the political front: Markets will also be keeping a close eye on bond markets, after investors analyzed the risk of China halting its Treasury bond purchases last week.
Henry’omics:
From Friday night’s closing bell post, “…rebound followed by a relapse; the sector opened up, stayed up at mid-day and closed to the downside. As the market hits new highs and indexes respond together … while sector volume is relatively low for the upsiders and higher for the downsized.”
I also asked, “Is it better to leave cents on the table by selling than losing a quarter by staying?” My answer, I am usually early and find it better in this market to be less patient and greedier.”
With follow-on, “Today’s moves aren’t about fundamentals, but recognizing some oversold and many a speculative upside . After many negative moves traders and algorithms WILL push to buy dips.
One of Warren Buffett’s favorite stock-market truisms is that investors should be “fearful when others are greedy and greedy when others are fearful.” Right now, the investing world looks much closer to the greedy side of the scale, which more and more analysts are citing as a reason for caution. <Ryan Viastelica, MarketWatch>
Valuations are still stretched by many metrics. The relative strength index, is at its highest level since 1995, which indicates the S&P 500 is at its most overbought level in more than 20 years.
Go with the winds as this "boat" has a sail!
The cell therapy sector’s record over 5 sessions (of 40 covered companies): The RegMed and cell therapy sector was closed on Monday, closed NEGATIVE on Friday, POSITIVE on Thursday and Wednesday and NEGATIVE last Tuesday:
· Monday was a market holiday
· Friday closed NEGATIVE with 21 decliners, 19 advancers and 0 flat;
· Thursday closed POSITIVE with 15 decliners, 22 advancers and 3 flat;
· Wednesday closed POSITIVE with 18 decliners, 20 advancers and 2 flats;
· Tuesday closed NEGATIVE with 21 decliners, 18 advancers and 2 flats;
Today’s indications:
- The iShares Nasdaq Biotechnology (IBB) is indicating a POSITIVE +0.25% in Tuesday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) is indicating a POSITIVE +0.42% in Tuesday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Tuesday’s pre-open;
- The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.46% in Tuesday’s pre-open
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed down -$0.10 to $4.20 41.3 K shares traded <3 month average = 105.9 K shares>after Thursday’s flat $4.30, Wednesday’s +$0.10 to $4.30 and last Tuesday’s down -$0.15 to $4.20 the previous Monday’s $0.05 to $4.35 Since 1/2/18, the stock has floated from $3.75. AGTC has clinical trial timing issues and spending woes – Maintaining SELL;
Capricor (CAPR) closed up +$0.05 to $1.78 with 479.4 K shares traded <3 month average = 740.8 K shares>after Thursday’s $0.07 to $1.73, Wednesday’s +$0.01 to $1.66, last Tuesday’s -$0.02 to $1.65 and the previous Monday’s +$0.06 to $1.67. Cash is getting low and CAPR NEEDS to finance. It’s up from $1.57 in five (5) sessions; mark my words, the trigger will be pulled soon – Maintaining SELL;
Intrexon (XON) closed up +$1.49 to $14.71 with 2.546 M shares traded <3 month average = 1.628 M shares>. AquaBounty Technologies (AQB) a majority-owned subsidiary of XON priced an offering of an aggregate of 3,692,307 shares, together with warrants to purchase up to 3,692,307 shares priced at $3.25 per share and associated warrant. Having started 2018 at $13.47, having seen a high of $14.71 and a low of $12.72, it could be an “Icarus” candidate – SELL;
Pluristem (PSTI) closed up +$0.09 to $1.61 with 933.6 shares traded <3 month average = 480.7 K shares> after publishing a peer-reviewed article in the journal Scientific Reports, titled, “Human Placental-Derived Adherent Stromal Cells Co-Induced with TNF‑α and IFN‑γ Inhibit Triple-Negative Breast Cancer in Nude Mouse Xenograft Models” after Thursday’s $1.52, Wednesday’s $1.53, Tuesday’s $1.60 and the previous Monday’s $1.47 while 1/2/18 started at $1.47. Post news, PSTI never seems to hold its “ups” – BUY to SELL;
Sangamo Therapeutics (SGMO) closed up +$1.60 to $18.30 with 2.27 M shares traded <3 month average = shares. Last week saw $17.15 (Thursday), $17.40, $16.90 (Tuesday)and Monday’s $16.70 while the previous week traded in a range of $17.20 to $17.55, The upsides have seen some serious volume which could make it a target to lighten the “load” with a month’s (so far) low of $16.70 and a high of $18.30 – SELL;
Vericel (VCEL) closed up +$0.175 to $6.625 with 607 K shares traded <3 month average = 566.3 K shares>after Thursday’s flat at $6.45. After a week’s range of $6.05 to $6.45 followed a short week’s range of ups and downs, $5.70 to $5.90 having ended 2017 at $5.45. Luckily VCEL expanded its debt accumulation rather than an offering as cash was needed for operations but, it still cost shares and warrants for the set-up. In seven (7) sessions, VCEL has jumped from $5.70 to $6.63, that’s $0.93 or a premium of 14.02% – Maintaining SELL;
Verastem (VSTM) closed up again +$0.04 to $3.05 with 477.6 K shares traded <3 month average = 879.1 K shares>after Thursday’s +$0.05 to $3.01 with 593.6 K shares traded, Wednesday’s +$0.02 to $2.96 last Tuesday’s $2.94 and the previous Monday’s -$0.05 to $2.92. VSTM increased its existing borrowing limit under the loan facility from $25 million to up to $50 million in financing from Hercules Capital. VSTM had received the first $15 million of financing under the original Loan and Security Agreement. Additional tranches of up to $35 million in aggregate will be available to VSTM to drawdown subject to certain conditions – it’s better (cheaper) than an offering, although it still costs stock and warrants. The aftermarket indication is a positive +$0.03 or +1.01% – Maintaining BUY;
Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors. All investments are subject to risks. Investors should consider investment objectives.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.
