April 23, 2018 7:38am

Investors are frazzled by the sector’s downside trends

 

With a byproduct of negativity; as usual after damning sessions, the oversold will hear the sirens song with a shift to the upside

To then be lured back to the bottom with even further damage to their pricing

 

It’s just another tempest as quarterly financial results i.e. earnings beginning 5/1

 

Out and about: The University of Texas Health Science Center at Houston (UTHealth) and Athersys, Inc. (ATHX) plan to conduct a P2 clinical trial evaluating Athersys’ MultiStem® cell therapy for early treatment and prevention of complications after severe traumatic injury - BUY

Pre-open indications:  One (1) BUY

 

Where the understanding of the indications sheds light on share pricing!

Mixed to weak open expected

Dow futures are DOWN -0.05% (-12 points) and NASDAQ futures are UP +0.07% (+5 points)

 

U.S. stock index futures ticked mixed ahead of Monday's open,

European markets moved lower

Asian stocks closed mostly lower

 

Data docket: a flash reading of the latest composite purchasing managers' index (PMI) will be published 9:45 a.m. ET, while existing home sales will follow shortly after, at 10 a.m. ET.

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating 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 indicating a NEGATIVE -0.07% downside in Monday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.17% downside in Monday’s pre-open

 

Henry’omics:

Today’s moves: The sector is distinctly oversold yet few shining lights stand-out. Speculation will be a thematic as those equities without news will hem and haw.

 

From Friday night’s newsletter: “… the sector and market got pummeled breaking below the 50-day moving average causing a technical washout.”

 

Market issues:  Volatility was atypically low in 2017, but returned in dramatic fashion earlier this year. Currently, the VIX, +5.76% is at 16.49. While this is below its long-term average near 20, it is up 50% so far this year. The Dow is down 1% year-to-date while the S&P 500 is off 0.1% while the NASDAQ remains up 3.8% for the year.

A re-cap:

  • In 15 sessions of April’s closings (of 40 covered companies) there have been eight (8) negative and six (6) positive and one (1) neutral closes;
  • In the last five (5) sessions, the iShares NASDAQ Biotechnology (IBB) was down in three (3) and up in two (2) sessions for an aggregate of +1.49% with Friday (-0.88%), Thursday (-1.36) and Monday (0.68%) being down and Wednesday (+0.07%) and Tuesday (+1.94%) being up;

 

  • Friday’s gainers ranged from +0.28% <ONCE +$0.23> to +7.06% <NWBO +$0.0125> in 12 equities;
  • Friday’s decliners ranged from -0.27% <FATE -$0.03 > to -13.89% <VTGN -$0.15 > in 22 equities;

 

 

My evaluation:  WAIT until the first hour (beyond the open) to make any decision to enter; this could turn out to be very pivotal week for the sector, in particular, given the onslaught of upcoming quarterly results i.e. earnings and the way the charts are influencing, what I call apprehension.

 

Company in my headlights:

Athersys, Inc. (ATHX) closed (Friday) at $2.02. The University of Texas Health Science Center at Houston (UTHealth) and ATHX announced plans to conduct a P2 clinical trial evaluating MultiStem® cell therapy for early treatment and prevention of complications after severe traumatic injury. UTHealth reported that its McGovern Medical School has received a grant award from the Medical Technology Enterprise Consortium (MTEC) to support the study. The MTEC grant will provide $2 million in funding and the Memorial Hermann Foundation will provide an additional $1.5 million. Athersys will provide the investigational clinical product for the conduct of the trial, as well as regulatory and operational support, as its contribution to the trial. The objective of the clinical study, as proposed by UTHealth in its grant application, is intended to evaluate the safety and effectiveness of MultiStem for the treatment of severely injured patients for the prevention and early treatment of complications after severe traumatic injury. The proposed study is anticipated to be a randomized, double-blind, placebo-controlled Phase 2 clinical trial estimated to enroll approximately 150 severely-injured trauma patients within hours of hospitalization who have survived initial treatment and are admitted to the intensive care unit. The MTEC grant will provide funding for approximately 50% of the trial cost, with additional funding being provided by the Memorial Hermann Foundation. Athersys’ support will include its cost of providing clinical product for the conduct of the trial and regulatory and operational support – 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.