September 26, 2018 7:30am
There are few upsides that survive the risk of the incline
Selective evidence of a “tumble-down” concept as volume creeps higher
Pre-open indications: 4 SELLs and 2 BUYs
Presenting alternative hypotheses clarifies material facts and evidence available to investors. “Devil’s Advocacy” also provides greater confidence that the current sector outlook will hold-up to close scrutiny!
Spare the SELL call, underfund the portfolio – SUBSCRIBE!
U.S. stock index futures are edging higher
Dow futures are UP +0.18% (+49 points) and NASDAQ futures are UP +0.24% (+18 points)
U.S. stock index futures posted slight gains ahead of Wednesday's open.
European markets trade mixed ahead of Fed decision
Asia markets saw gains, despite the White House's restatement of its tough stance on trade.
Data docket: mortgage applications rose 2.9% as interest rates move higher, followed by new home sales at 10 a.m. ET.
Today’s indications:
- The iShares Nasdaq Biotechnology (IBB) is NOT indicating 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 +0.1% UPSIDE in Wednesday’s pre-open
Henry’omics:
The Federal Open Market Committee’s final day of its September monetary policy will end Wednesday, expecting the Fed to announce a quarter-point rate hike when it concludes its meeting and delivers its announcements at 2 p.m. ET.
We are even closed to month's and quarter's end; if there is a spiking high, look for traders and ...funds to CUT their exposure and captalize on UPSIDE!
I always want to know what happened PRIOR to what might happen today – it sets a tone of consequence:
From Tuesday’s night’s newsletter: “the sector is so fickle. Another close call on the Advance/Decline Line (A/DL); I am NOT seeing ANY indicator stand-out as confidence numbers are being driven by trading and low volume.”
I also stated, “I also believe on some sector equities that have been locked down by low share pricing and volume to be EXPLOITED for their spikes!”
The iShares NASDAQ Biotechnology (IBB): a week’s history lesson
- Tuesday closed up +0.23%
- Monday closed up +1.19%
- Friday closed down -0.62%
- Thursday closed up +1.39%
- Wednesday closed up +0.13%
- For a five session aggregate of +2.32% - consider a sideways move!
Of the 45 companies covered on Friday; 32 downside equities finished in a range of -0.21% (XON) to -15.01% (NTLA) while 11 upside equity oscillated from +0.99% (HSGX) to +6.05% (BTX) with 2 flat closes (AGTC and RENE.L).
Of the 45 companies covered on Tuesday; 20 downside equities finished in a range of -0.16% (CLBS) to -19.57% (VSTM) while 23 upside equity oscillated from +0.27% (VYGR) to +26% (AGTC) with 3 flat closes (ADVM, RENE.L and BCLI).
In 16 sessions in September (so far) – there were 8 negative closes and 8 positive close;
In 21 August sessions – 6 had negative and 15 had positive closes
Companies in my headlights – It’s your decision; I provide the idea and context:
Verastem Oncology (VSTM) closed down -$1.74 to $7.15 after Monday’s +$0.24 to $8.89. VSTM is rising in the aftermarket (+$0.73 or +10.21%) on news of licensing agreement for the development and commercialization of Copiktra ™ in China with an upfront payment of $15 M and up to $30 m in milestones. Monday, VSTM won FDA approval for a treatment for multiple types of blood cancer. The drug has been approved for use in multiple types of blood cancers, including chronic lymphocytic leukemia and small lymphocytic lymphoma - Maintaining BUY;
Applied Genetic Technologies (AGTC) closed up +$1.30 to $6.30 after Monday’s +$0.60 to $5.00 on the basis of a comparables (Nightstar Therapeutics (NITE) which was based on released initial data from a P1/2 study of its product candidate NSR-RPGR that showed multiple patients achieved an improvement in microperimetry, Wells Fargo analyst Birchenough said in the upgrade note – “with the stock is trading below its cash on hand and at a discount to Nightstar, AGTC has a favorable risk-reward profile” according to Wells Fargo – is it a “push” to solidify Wells Fargo position as a banker for an offering that AGTC needs to finance? AGTC has had clinical issues over the past two years, late to enroll, suddenly a whole new team to monitor and measure and what if NITE gets a pivotal advance from the FDA to advance, they’re still late to the “party”. Spikes come easy and go as quick with data projected maybe at the end of 2018 or early 2019. There is a $1.90 or +30.15% in two (2) sessions, an “Icarus” flight – SELL;
BioLife Solutions (BLFS) closed up +$0.43 to $17.53 with an aftermarket indication of -$0.55 or -3.14%. BLFS’ share price has been a bouncing ball and I believe overbought – SELL;
Editas Medicine (EDIT) closed up +$2.02 to $32.57 with an aftermarket indication of -$0.62 or -1.91%. EDIT has a 52 week change of +50.49% and with September and Q3 ending, I’d be lightening the “load” of this “bouncing” share pricing – SELL;
Fate Therapeutics (FATE) closed down -$0.65 to $15.63 and has a positive aftermarket indication +$0.34 or +2.18%. FATE closed its offering of 10.6 M shares, which included 1.388 M shares that were exercised by an option to purchase additional shares, at a price of $13.50 per share. Aggregate gross proceeds from this offering, including exercise of the option, were approximately $143.8 million, prior to deducting underwriting discounts and commissions and estimated offering expenses - BUY;
Intrexon (XON) closed down -$1.78 to $17.29 after Monday’s +$4.57 to $19.07 a +31.52% jump which hasn’t been seen in a long while – a “pot pandemonium”? Engineering mosquitoes and salmon didn’t capture investors’ imagination for Intrexon Corp. So now it’s looking to join the marijuana frontier. After an “Icarus” move, traders will look to trim their wings with a pre-market indication of -$0.40 or -2.31% - Maintaining SELL;
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.
