April 16, 2018 8:02am
What’s considered a buying opportunity pricing?
Speculation and sentiment both begin with an s…
Pre-open indication: 3 SELLs and 2 BUYs
Where the understanding of the indications shed light on share pricing!
A strong open expected
Dow futures are UP +0.55%% (+133 points) and NASDAQ futures are UP +0.51% (+34 points)
US futures post solid gains ahead of the open
European markets edged lower
Asian markets closed mixed on Monday.
Data docket: data and earnings are likely to keep investors busy. Retail sales and the Empire State manufacturing survey are both due out at 8:30 a.m. ET, followed by business inventories and the NAHB/Wells Fargo Housing Market Index at 10 a.m. ET. Treasury International Capital (TIC) data will be released at 4 p.m. ET.
Political front: News coming out of the White House after former FBI Director James Comey’s interview with ABC News on Sunday.
- The iShares Nasdaq Biotechnology (IBB) is indicating a POSITIVE +0.5% upside in Monday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) is NOT indicating 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 +0.44% upside in Monday’s pre-open
Today – as and if we revisit resistance, will support hold or fold?
From Friday night’s newsletter: “the sector slipped as I had stated, it was due based on the advance/decline lines, volume and resistance hurdles with a bit of a recovery in the final hour to close barely negative. Another I told you so …”
As I had also stated, “Recent gauges of sentiment, which have alternated, suggest that “things are as good as they gets and raises the question of how much better can they get from here.”
Review the last 10 sessions of April’s closings (of 40 covered companies), there have been four (4) negative and four (4) positive closes with two (2) neutral – a split decision:
- Friday closed barely NEGATIVE with 18 decliners, 17 advancers and 5 flats;
- Thursday closed POSITIVE with 8 decliners, 30 advancers and 2 flats;
- Wednesday (3/11) closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
- Tuesday closed POSITIVE with 7 advancers, 32 advancers and 1 flat;
- Monday closed POSITIVE with 12 decliners, 23 advancers and 5 flats;
- Last Friday (3/6) closed NEGATIVE with 32 decliners, 7 advancers and 1 flat;
- Thursday closed NEGATIVE with 25 decliners, 11 advancers and 4 flats;
- Wednesday closed POSITIVE with 11 decliners, 28 advancers and 1 flat;
- Tuesday closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
- The previous Monday (3/1) closed NEGATIVE with 31 decliners, 9 advancers and 0 flats;
- Friday’s decliners ranged from -0.48% <NWBO -$0.0011> to -8.63% <IMUC -$0.02 > in 18 equities;
- Friday’s gainers ranged from +0.14% <QURE +$0.04> to +9.78% <AGTC +$0.45> in 17 equities;
Consider the iShares NASDAQ Biotechnology (IBB) over the last nine (9) sessions was up +1.69%: I still see advancement followed by a decline …
- Friday was down -0.71
- Thursday was up +1.32%
- Wednesday (3/11) was down -0.35%
- Tuesday was up +2.75%
- Monday was up +1.82%
- Friday (3/6) was down -3.01%
- Thursday was down -1.62%
- Wednesday +2.91%
- Tuesday +0.37%
- The previous Monday (3/2) -3.95%
My evaluation: futures are tilting higher on Monday, with number of economic data updates lined up for release, including retail sales and a home builder’s index. Enjoy the upside but, be ready to “kiss it goodbye” on little notice!
Company in my headlights:
Applied Genetic Technologies (AGTC) closed up +$0.45 to $5.05 with 155.9 k shares traded <3 month average = 106.2 K shares> after Thursday’s +$0.60 to $4.60 with 220.6 K shares traded. AGTC has completed enrollment in a clinical study for the treatment of x-linked retinoschisis (XLRS). The real issue is do they have the bench strength to oversee the trial protocols? I say NO! There is also a question of being undervalued in relation to comparables yet, there is also an answer of execution and oversight of the protocols of clinical trials. Five (5) sessions ago, AGTC traded at $3.70, that’s a $1.35 or +26.2 % premium on a share that may NOT maintain be sustainable – Maintaining SELL;
Bellicum Pharmaceuticals (BLCM) closed up +$0.74 to $8.98 with 2.8 M shares traded <3 month average = 1 M shares> +$1.39 to $8.24 with 8.65 M shares traded after Wednesday’s +$0.10 to $6.85 with 439.6 K shares traded. The FDA lifted the clinical hold on studies of BPX-501 in the U.S. The FDA clinical hold did not affect the BP-004 registrational trial in Europe, which is fully enrolled. However, the market is ruled through algorithms in a capricious sector. The aftermarket indication is a NEGATIVE -$0.07 or -0.85%. In six (6) sessions, there is a $2.59 or +28.8% premium in the share price – Maintaining SELL;
Biostage (BSTG) closed flat again at $2.60 on Friday, Thursday and Wednesday after Tuesday’s -$0.01 to $2.60 with 1.65 K shares traded <3 month average = 9.24 K shares> after last Monday’s +$0.19 to $2.61 with 2.2 K shares traded. KPMG, their accounting firm has dropped their accounting overview – over an on-going concern issue (?) just another reason on top of many to exit this equity after the MANY misdeeds of creating a $47 M deficit over three (3) years with NO significant results. Notice the new advisory board member additions, Dr. Christine Finck and the new BOD member, James Shmerling - both are members of the Connecticut Children's Medical Center where pre-clinical “activities” are taking place - are we back in a place where there will be MORE transparency issues. They can NOT oversee their OWN work or profit from the hospitals investment – will investors be subjected to yet another development cover-up? WHY are they being compensated (stock and cash) to advise on their own positions? The Boston Business Journal did an article of BSTG’s terminal death suit; even if they are covered by insurance, there will be huge legal costs to keep the deposition doors open – Maintaining SELL;
uniQuire (QURE) closed up +$0.04 to $29.35+$0.30 to $29.31 with 282.7 K shares traded <3 month average = 378.9 K shares> after Wednesday’s +$1.98 to $29.01 with 597.5 K shares traded. QURE had risen 370% in the past year and has more than fully recovered from the drop following its earnings announcement on 3/14. Momentum is telling – SELL to BUY;
Verastem (VSTM) closed up +-$0.07 to $4.14 with 1.5 M shares traded <3 month average = 802.3 K shares> after Thursday’s +$0.30 to $4.07 with 3.9 M shares traded. The aftermarket indication is a POSITIVE +$0.07 or +1.72%. In the last five (5) sessions, VSTM has a premium of $1.11 or +27.02%; after all that volume – I’d exit into strength even if I left money on the table– SELL to 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.