RegMed Investors’ (RMi) pre-open: the drift of the oversold to a steep upside

April 5, 2018 7:49am

Cell therapy and regenerative therapy shares may be on the verge of a rebound over the next few sessions, as shares of the NASDAQ Biotech ETF (IBB) have tested and held at a critical support level of $101.

… Or is it an indicator of an upcoming slide?

The sector’s volatility is worth suffering through if there are gains that are sustainable

However, if after all the losses; profit taking is a motivation to recapture a portfolio’s value in short-term increments

Market timed pre-open indication:  4 SELLs and 3 BUYs

Where the understanding of the facts shed light on share pricing!

Positive open expected

Dow futures are UP +0.28% (+69 points) and NASDAQ futures are UP +0.81% (+54 points)

U.S. stock index futures posted solid gains ahead of Thursday's open, following a roller coaster session seen during the previous trading day.

European stocks rally as trade fears ease

Asia Pacific markets closed higher, as recent investor worries over an elevation in U.S.-China trade tensions abated.

Today’s concern: With the market rebounding and the sector having spiked, will traders exit and put their money to work elsewhere or stay until the overbought dazzle?

Data docket:  jobless claims and international trade numbers, which are due out at 8:30 a.m. ET.

Political front: Markets have been on edge during recent sessions amid concerns of a potential trade war between China and the U.S.  The White House tried to play down concerns over a trade war between the two major consumer nations. Also, market watchers will be keeping an eye on what President Donald Trump says about Amazon, the main talk of the town is likely to be Facebook.

Today’s indications:

• The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Thursday’s pre-market;
• The SPDR S&P Biotech ETF (XBI) is NOT indicating in Thursday’s pre-market;
• The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Thursday’s pre-open;
• The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.33% upside in Thursday’s pre-open

Henry’omics:

From Wednesday night’s newsletter: “… relief rally and a rush to the upside after a zig, zag and zig again, the sector shifted gears. The problem, volume is still low while support is fleeting.”

I also stated. “… These undervalued equities are DUE for a rebound as many not most “names” had 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.”

“The reality is the equity market has spent the last four weeks correcting, and the 200-day moving average, along with the 2,600 level of the February lows, were the likely technical support levels.”

At the end of the day, there is no way to know if stocks are “cheap” or “expensive,” and the wheezing sector is proof.

What to be on the look-out for: “Beware, algorithms and ETFs keep chaos at work.”

Review the last 5 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;
• Last Thursday closed POSITIVE with 16 decliners, 22 advancers and 2 flats;

Volatility (the VIX) is still a big driver which was down again -6.99% after Tuesday’s -10.67% after Monday’s up +18.28% after Thursday’s -12.68% and last Wednesday’s +0.76%.

A re-cap: “… Higher-capitalized companies will generate fewer sleepless nights for shareholders because even though they are burning through cash in pre-clinical programs and on-going clinical trials; they can be beset by clinical trial outcomes.”

• Wednesday’s decliners ranged from -0.57% <MDXG -$0.04> to -14.09% < CLLS -$5.43> in 11 equities;
• Wednesday’s gainers ranged from +0.46% <CYTX +$0.0013> to +15.54% <VCEL +$1.50 > in 28 equities;

Consider the iShares NASDAQ Biotechnology (IBB) over the last six (6) sessions it’s up +0.87%:

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

My evaluation:  I am worried about a reversal in the upcoming sessions of those with strong gains from Wednesday’s robust finish!

Company in my headlights - speculation is at its best re market timing:

Adverum Biotechnologies (ADVM) closed up +$0.20 to $5.75 with 417.9 K shares traded <3 month average = 1.451 M shares>. The aftermarket indication is a DOWNSIDE -$0.03 or -0.43% - SELL;

bluebird bio (BLUE) closed up +$12.65 to $173.10 with 882.7 K shares traded <3 month average = 876.8 K shares>. I’m still and have been concerned with BLUE’s upside and after a one big spurt; I’d be a profit-taker as safety is a concern – SELL;

Cellectis (CLLS) closed down -$5.43 to $33.10 with 1.48 M shares traded <3 month average = 207.8 K shares>. The aftermarket indication is a DOWNSIDE -$0.34 or -0.97% as the ADS has been priced at $31.00 - SELL;

Vericel (VCEL) closed up +$1.50 to $11.15 with 1.8 M shares traded <3 month average = 1 M>. The aftermarket indication is an UPSIDE of +$0.50 or +4.48% - BUY;

uniQure (QURE) closed up +$0.92 to $23.18 with 198.5 K shares traded <3 month average = 388 K shares>. Volume is small, volatility is steep and I believe speculative – SELL;

Sangamo Therapeutics (SGMO) closed up +$1.10 to $18.90 with 2.16 M shares traded <3 month average = 2.15 M shares>. The aftermarket indication is an UPSIDE of +$0.45 or +2.38% - BUY;

Stemline Therapeutics (STML) closed up +$0.85 to $15.55 with 281.5 K shares traded <3 month average = 350.8 K shares>. STML has initiated its rolling submission of a Biologics License Application (BLA) for SL-401 to the U.S. Food and Drug Administration (FDA). SL-401 is a targeted therapy directed to CD123 that has been granted Breakthrough Therapy designation (BTD) by the FDA – 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.