RegMed Investors’ (RMi) closing bell; relief rally and a rush to the upside

April 4, 2018 6:20pm

After a zig, zag and zig again, the sector shifted gears

The problem, volume is still low while support is fleeting

Beware, algorithms and ETFs keep chaos at work

Best idea, pre-open indications: 1 hit, Cellectis (CLLS) closed down -$5.43 or -14.09%

End of day briefing; the “numbers” speak!

Henry’omics:

Today’s moves … underline how investors are having difficulty gauging the impact of trade-related threats and counter-threats between the U.S. and major trading partners.

All three indexes had dropped more than 1% at their lows of the session, and the NASDAQ at one point traded below 6,829.49, the level that marks correction territory, or a 10% drop from a closing peak.

With the positive close, however, the NASDAQ ended in positive territory for the year and the S&P 500 finished safely above its 200-day moving average for a second straight session, a positive sign for long-term momentum trends.

The issue has contributed to volatility in both directions as investors attempt to calculate what effect, if any, it will have on ”our’ universe.

Yet, we are seeing an upside relief …

After the cell therapy sector sold off in the first days of April and the month of March having been held to new lows as Q1/18 ended, having exhibited spurious support and very negative sentiment.

Yet, these undervalued equities are DUE for a rebound as many not most “names” have been sold aggressively due to their inclusion in index funds targeted by predatory algorithms during this current correction.

Fortunately, this speculative biotech sub-group offers-up a variety of potential upside setups …

Which could be hindered by the onset of Q1/18 financial results i.e. “earnings or as I call them LPS (loss-per-share) endings.

However, higher-capitalized companies will generate fewer sleepless nights for shareholders because even though they are burning through cash by pre-clinical programs and on-going expensive clinical trials; they can be beset by clinical trial outcomes.

From the pre-open’s newsletter, “…back on the roller-coaster as the moves in pre-market trade come as China announced brand-new tariffs on 106 U.S. products. The IBB (-1.64%), XBI (-1.65%), XLV (-0.66%) and the IWM (-0.67%) declines indicate continued   anxiety in the stem, cell gene and regenerative therapy sector after yesterday’s neutral and Monday’s negative closes keeps shareholder value is under a cloud’”

As I had stated, ““cell therapy investment has been a heart breaker … Experiencing emotional selling and zero support, a far cry from the highs of 2015. From the ashes, can an oversold phoenix rise? For once, pray for algorithm recognition!”

The advance/decline line scenario of 40 covered companies:   

• The open was negative with the A/DL to 11/27 and 2 flat;
• 10:30 a.m. flipped positive with an A/DL of 22/18 and 0 flats;
• The mid-day stayed positive with an A/DL of 26/13 and 1 flat;
• The close concluded positive with an A/DL of 28/11 and 1 flat;

As I had also stated, “This is still a sector trading on fear instead of fundamentals and technicals, which has made it frustratingly difficult to figure out where we’re headed in the near term.”  

• The upside was fragmented and downside were glaring …
• Volume is STILL low …

Volatility in the sector remains elevated … look at the rush upwards …

Review the last 6 session’s close (of 40 covered companies):

• Wednesday closed POSITIVE with 11 decliners, 28 advancers and 1 flat;
• Tuesday closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
• Monday closed negative with 31 decliners, 9 advancers and 0 flats;
• Friday was a market holiday
• Thursday closed POSITIVE with 16 decliners, and 22 advancers and 2 flats
• Last Wednesday closed NEGATIVE with 26 decliners, 13 advancers and 1 flat;

Pre-open indications: 1 hit

Cellectis (CLLS) closed down -$5.43 or -14.09% after yesterday’s $7.80 or +25.38% as a $175 M ADS offering was announced

MY working five (5) trend lines:

… The greatest volume to the downside:  ONVO, CLLS, MDXG, IMUC and NWBO

… Upside volume was weighted to:  SGMO, VCEL, XON, BLUE and FATE

… Biggest $ downside:  CLLS (-$5.43), OSIR (-$0.24), KOOL (-$0.17), RENE.L (-0.15) and BSTG (-$0.10)

… Best moves to the $ upside:  BLUE (+$12.45), VCEL (+$1.50), ONCE (+$1.40), SGMO (+$1.10) and RGNX (+$1.05)

… Flats:  ISCO

Daily analytics:

U.S. stocks closed sharply higher Wednesday, in the latest example of heavy intraday volatility as investors continued to “relate” to the potential impact from, a trade war between the US and China.

• The Dow rose 231 points, or 1%, to 24,264; it had been down by as many as 510 points at its session low.
• The S&P 500 index gained 30 points to 2,645, or 1.2%.
• The NASDAQ gained 101 points, or 1.5%, to 7,042.

The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market,

• Wednesday traded at 20.06, down -4.93% …
• Tuesday traded at 21.10, down -10.67%
• Monday traded at 23.62, up +18.28%
• Friday was a market holiday
• Thursday traded at 19.97, down -12.68%
• Last Wednesday traded at 22.77, up +0.76%

The iShares Russell 2000 (IWM) indicated:

• Wednesday was up +1.27%
• Tuesday +1.40%
• Monday -2.37%
• Friday was a market holiday
• Thursday +1.02%
• Last Wednesday -0.03%

The iShares NASDAQ Biotechnology (IBB) indicated:

• Wednesday was up +2.91%
• Tuesday +0.37%
• Monday -3.95%
• Friday was a market holiday
• Thursday +0.72%
• Last Wednesday +0.82%

The count - decliners versus gainers:

……. look at the differences in decliners:

• Wednesday’s decliners ranged from -0.57% <MDXG -$0.04> to -14.09% < CLLS -$5.43> in 11 equities;
• Tuesday’s decliners ranged from -0.11% < OSIR -0.01> to -7.28% <BSTG -$0.22 > in 19 equities;
• Monday’s decliners ranged from -0.74% <CAPR -$0.01 > to -5.42% < BLUE -$9.25> in 31 equities;
• Friday was a market holiday
• Thursday’s decliners ranged from -0.33% <VSTM -$0.01 > to -3.68% <SGMO -$0.73 > in 16 equities;
• Last Wednesday’s decliners ranged from -0.31% <FCSC -$0.0018 > to -8.30% <AXGN -$3.30 > in 26 equities;

Versus

… Look at the percentage’s (%) and spreads …

• Wednesday’s gainers ranged from +0.46% <CYTX +$0.0013> to +15.54% <VCEL +$1.50 > in 28 equities;
• Tuesday’s gainers ranged from +0.34% <STML +0.05 > to +25.38% < CLLS +$7.80> in 18 equities;
• Monday’s gainers ranged from +20.55% <BLFS +$1.05 > to +1.19% <CYTX +$0.0034> in 9 equities;
• Friday was a market holiday
• Thursday’s gainers ranged from +0.14% <AXGN +0.05> to +10.70% <BTX +$0.26> in 22 equities;
• Last Wednesday’s gainers ranged from +0.41% <BTX +$0.01> to +4.90% <MDXG +$0.33> in 13 equities;

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.