February 26, 2018 7:34am
Three (3) positive closes in a row, the machines are “algorithming” and maybe a fourth (4th)
However, volatility matters and its swings
When the weekly gains outstrip the fundamentals and technicals; the sector may come to understand its vulnerabilities or maybe not although the inevitable is the downside
Pre-open indications: 1 BUY and 6 SELLs
Higher open expected
Dow futures are UP +0.66% (+166 points) and NASDAQ futures are UP +0.30% (+21 points)
U.S. stock index futures were sharply higher ahead of Monday's open.
European shares traded higher Monday morning
Asian markets closed higher on Monday,
Issues to be faced at the open: Investors will be waiting for news surrounding the NRA's relationship with leading businesses, with a growing list of companies choosing to end their partnerships
Data docket: new home sales are due out at 10 a.m. ET, followed by the Dallas Fed's Texas manufacturing outlook survey, set to be released at 10:30 a.m. ET. The Chicago Fed's National Activity Index will also come out at 8:30 a.m. ET.
The economy: While U.S. government debt yields remained under pressure Monday, concerns around the future of the economy and monetary policy in the States keeps markets on edge.
Been where, done what …
RegMed, stem and cell therapy sector’s record over 5 sessions (of 40 covered companies):
· Friday closed POSITIVE with 17 decliners, 21 advancers and 2 flat;
· Thursday closed POSITIVE with 10 decliners, 28 advancers and 2 flats;
· Wednesday closed POSITIVE with 13 decliners, 24 advancers and 3 flats;
· Tuesday closed NEGATIVE with 26 decliners, 12 advancers and 2 flats;
· Last Monday the market was closed for President’s Day
Henry’omics:
From last Friday night’s newsletter, “…sector reverses losses late afternoon. Algorithms kicked the sector to the upside along with the IBB (+2.08%) and XLV (+1.63%) which were not indicating in the pre-open with the XBI (+1.51%) jumping higher as the NASDAQ (+1.77%) floated. Volatility is like the current New England weather, your e-mail starts to fill up with jokes about when bathing suit weather appears and then disappears in hours. Which also shows sector equities are vulnerable to machine impetus in no, good and bad news days.”
As I have said and read, “I think we are set up for an interesting Monday morning. Can we build on this momentum and go forward or is this as quick fade?”
Today’s indications:
- The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Monday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) is indicating a POSITIVE +0.23% upside in Monday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Monday’s pre-open;
- The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.36% upside in Monday’s pre-open
Companies in my headlights:
Adverum (ADVM) closed up +$0.15 to $6.95 with 1.06 M shares traded <3 month average =1.21 M shares>after Thursday’s +$0.40 to $6.80 with 1.75 M shares traded. A premium of +$0.75 in four (4) sessions with a +$0.75 0r +10.79% premium in a jittery sector, traders sell into strength – Maintaining SELL;
AxoGen (AXGN) closed up another +$0.30 to $28.95 with low 174.7 K shares traded <3 month average = 291.9 K shares>after Thursday’s +$0.15 to $28.65 after Wednesday’s +$0.75 to $28.50 with 227.2 K shares traded after Tuesday’s +$0.35 to $27.75 with 267.2 K shares traded. A little too “toppy” for me in eleven (11) sessions the shares have jumped from $24.40, that’s a $4.65 or a +16% premium - Maintaining SELL;
bluebird bio (BLUE) closed up +$4.85 to $206.50 with low 424.8 K shares traded <3 month average = 979.2 K shares>after Thursday’s down -$6.20 to $201.20 with 1 M shares traded after Wednesday’s +$1.95 to $207.40 in a day’s range that went as high as $213.20 before it sold-off with 303.4 K shares traded after Tuesday’s -$7.90 to $205.45 with low volume of 593.1 K shares traded. Quarterly results missed expectations, BLUE’s shares have risen 16% since the beginning of the year. BLUE released Q4/17 earnings on Wednesday without warning or holding a conference call. Nevertheless, is there an arrogance factor as BLUE had to issue and update on Thursday evening. The aftermarket indication is a lean upside +$0.80 or +0.40% compared to the usual upside; as CEO Leschly laid out the BLUE's plans for filing three (3) marketing applications over the next two years: with regulatory authorities in the next two years: LentiGlobin in TDT in 2018, Lenti-D in [cerebral adrenoleukodystrophy] in 2019 and, with its partners at Celgene, bb2121 in multiple myeloma, also in 2019. What about 2018 (?), they’ll still be spending -Maintaining SELL;
Fate Therapeutics (FATE) closed up +$1.18 to $11.76 with 1.05 M shares traded <3 month average =671.2 K shares traded>. Like the company but traders are always on the prowl for strength and upside associated with volume; in nine (9) sessions, the stock has risen from $7.80 – a $7.80 or -66.3% premium - SELL;
Caladrius Bioscience (CLBS) closed flat at $4.26 with 2.57 K shares <3 month average =49.73 K shares>traded after Thursday’s +$0.24 to $4.28 with 45.5 K shares traded. Six (6) sessions ago, CLBS was trading at $3.78, maybe time to profit and maybe come back after quarterly results, that’s a $0.48 or 11.26% premium in the shares price – Maintaining SELL;
MiMedx (MDXG) closed down -$1.05 to $7.83 with 14 M shares traded <3 month average = 2.58 M shares> after Thursday’s -$0.17 to $8.88 with 5.57 M share traded with an aftermarket indication of +$9.10 or +1.13%. MDXG has been shaken by short seller drama and a current issue of accounting – what’s new. There is always a bounce back as 21/1 opened at $17.13, thus there is a wide upside margin – Maintaining BUY;
Stemline Therapeutics (STML) closed up +$0.15 to $17.75 with 309.4 K shares traded <3 month average = 284.8 K shares>after Thursday’s +$1.05 to $17.60 with 515.4 K shares traded. The aftermarket indication is AA positive +$0.05 or +0.28%; however, STML’s chart is just too “peaky” and the shares in eight (8) sessions have jumped from $15.35 having started the month at $15.85. Only 13% but is a Friday in a “jittery” sector as the NASDAQ weakened – Maintaining SELL;
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.
