May 2, 2018 8:15am

Momentum is being run up and down by anemic volumes

 

Consensus and expectation sensitivities are key indicators

Which doesn’t always stabilize share pricing?

 

Pre-open indications: 5 BUYs and 1 SELL

 

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

Slightly higher open expected

Dow futures are UP +0.06% (+14 points) and NASDAQ futures UP +0.31% (+20 points)

 

U.S. stock index futures pointed to slight gains ahead of Wednesday's open,  while investors awaited a monetary policy announcement from the Fed.

European markets were higher

Asian stocks closed with slight losses, although gains were seen in Australia.

 

Data docket: mortgage applications are due at 7 a.m. ET, followed by ADP employment figures at 8:15 a.m. ET.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is indicating a NEGATIVE -0.37% downside in Wednesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is NOT indicating in Wednesday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Wednesday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.2% upside in Wednesday’s pre-open

 

Henry’omics:

Today’s moves:  The moves in premarket trade came as markets across the globe showed a mixed picture. On Tuesday, U.S. stocks finished mixed, with the NASDAQ finishing in the black as it focused on earnings out of the tech space. On Wednesday, Asia closed mostly lower, while in Europe, stocks traded higher as earnings took center stage. <CNBC)

I am still cautious …!

From Tuesday’s night’s newsletter: hanging with a different crowd while volume stays low and offerings keep coming;  the sector needs retail investors to drive momentum as many question where is the new money going to come from? Any upside will emanate from algorithms and ETF balancing or maybe even a M&A event?”

Also as I had stated, “reshuffling the coverage – eight (8) drops because of development and financing issues and nine (9) additions in the gene therapy, CNS, gene editing and RNAi therapies …

Eliminating coverage – NWBO, IMUC, CAPR, CYTX, FCSC, ISCO and VTGN – all with financing and development issues and JUNO which was acquired

  • I have been sounding alarms about the outlook for Q1 results, share depreciations, dwindling cash positions and lessening platform developments.

Added coverage: VYGR, SLDB, BOLD, GBT IONS, ALNY, EDIT, NTLA and CRSP

It has been said of technical analysis that low-volume rallies tend to fail. Does this mean this rally is doomed? Most analysis focuses on daily trading volume.

History does tell us that lack of volume in itself is not a valid reason to sell. Furthermore, volume is not the indicator likely to tell us … about the “if “of this market.

 

Review the past session of 45 covered companies –  new batting line-up:

  • Tuesday closed POSITIVE with 15 decliners, 25 advancers and 5 flats;

 

A re-cap:

  • A new month to measure …
  • In the first sessions in May,  one (1) positive close;
  • In the last six (6) sessions, the iShares NASDAQ Biotechnology (IBB) was down in four (4) and up in two (2) session for an aggregate of negative -0.82% after Tuesday’s +0.39%, Monday’s -1.86%, Friday’s +0.29%, Thursday’s +1. 98%, Wednesday’s -0.01% and  last Tuesday’s -1.445%;
  • Tuesday’s gainers ranged from +0.45% <FIXX +0.09> to +5.30% <PSTI +$0.07> in 25 equities;
  • Tuesday’s decliners ranged from -0.75% <VCEL -$0.10> to -17.33% <RENE.L> in 15 equities;

 

My daily evaluation: Futures for the Nasdaq-100 index gained ground early Wednesday yet, the IBB has a negative 0.37% downside in Wednesday’s pre-market.

 

Company in my headlights:

Sage Therapeutics (SAGE) closed up +$3.81 to $147.73 with 268 K shares traded <3 month average = 670.7 K shares> and the aftermarket projects an upside of +$0.27 or +0.18%. Their filing of an NDA for postpartum depression marks an important milestone for SAGE, which has seen its share price soar over the past year thanks largely to the drug's success in late-stage trials. SAGE is also developing potential treatments for major depressive disorder, Parkinson’s disease, insomnia and other disorders of the central nervous system. SAGE’s success over the past year has sparked speculation that it could be acquired by a larger drug maker like Biogen (BIIB)) that focuses on neurological disorders. After a high 4/13 of $170.58 following 3/15’s $174.05 and 2/1’s $192.33 having started 2018 at $166.66 – BUY;

uniQure (QURE) closed up +$0.65 to $29.85 with an aftermarket indication of a downside -$0.10 or -0.32% so far due to a proposed 4 million share offering with a 600 K overallotment – SELL;

MiMedx Group (MDXG) closed down -$0.20 to $ with 1.62 M shares traded <3 month average = 3.5 M>  after Monday’s +$0.39 to $8.21 with 1.79 m shares traded  after Friday’s -$0.10 to $7.82 with 1 M shares traded after Thursday’s -$0.32 to $7.92 with 2.9 M shares traded.  Q1/18 earnings were good but, lacking “numbers”, the shares were down. I remember 1/29/18’s pricing $17.96 – Maintaining BUY:

Regenxbio (RGNX) closed up +$1.35 to $38.40 with a pre-market indication of +$0.35 or +0.91% based on news of the U.S. FDA has granted Fast Track designation for RGX-121. RGX-121 is a novel, one-time investigational treatment for Mucopolysaccharidosis Type II (MPS II), also known as Hunter syndrome, that is designed to deliver the human iduronate 2-sulfatase (I2S) gene directly to the central nervous system (CNS) using the NAV AAV9 vector – BUY;

Sangamo Therapeutics (SGMO) closed up +$0.55 to $16.35 with 1.579 M shares traded <3 month average = 2.339 M shares> after Monday’s -$0.95 to $15.80 with 3.65 M shares traded after Friday’s +$0.50 to $16.75 with 2.19 M shares traded, SGMO announced the California Institute for Regenerative Medicine (CIRM) has awarded it an $8 million grant to evaluate ST-400, a gene-edited cell therapy candidate for people with transfusion-dependent beta-thalassemia also with their $200 M 12.3 M share offering closing priced at $16.25 – Maintaining BUY;

Spark Therapeutics (ONCE) closed down -$1.37 to $74.95 with 549.3 K shares traded <3 month average = 654.2 K shares> after Monday’s -$1.15 to $76.32 with 512.9 K shares traded after Friday’s +$0.35 to $77.47.  ONCE should be up having entered into an agreement to sell its rare pediatric disease priority review voucher (PRV). The PRV was received when LUXTURNATM (voretigene neparvovec-rzyl) was approved by the U.S. FDA. Per the terms of the agreement with Jazz Pharmaceuticals (JAZZ); ONCE will receive $110 million upon closing of the transaction – Maintaining 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.