October 5, 2018 7:37am
So, let’s fly into the oversold and enjoy a tour of “some” upside!
The question, does the sector have the fuel to go the distance against the algorithmic headwinds?
Pre-open Indications: 2 BUYs, 5 SELLs and 1 TRADE
RMi outlines preludes and aftermaths; who is defining the metrics for individual investors and which broker, trader, fund or I-Bank is keeping you notified of the sector and market fluctuations? - SUBSCRIBE!
U.S. stock index futures are moving on the board
Dow futures are UP +0.09% (+25 points) and NASDAQ futures are DOWN -0.03% (-2 points)
U.S. stock index futures came under pressure ahead of Friday's open.
European stocks were lower, as investors awaited a key jobs report after benchmark U.S. Treasury yields surged to a fresh seven-year high <CNBC>.
Asian markets saw broad declines on the final trading day of the week, following a tumble overnight on Wall Street.
Data docket: treasury yields continued to tick higher, ahead of the 8:30 a.m. ET release of the employment situation report for September; to try and gauge how the U.S. economy is performing. Economists are expecting a rise of 185,000 jobs in September; August saw a rise of 201,000.
- The International Trade in Goods and Services figures are due at 8:30 a.m. ET, followed by consumer credit at 3 p.m. ET.
Today’s indications:
- The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Friday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) is NOT indicating in Friday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Friday’s pre-open;
- The iShares Russell 2000 (IWM) is indicating a -0.02% DOWNSIDE in Friday’s pre-open
Henry’omics:
Investors continued to show signs of jitteriness Friday, as U.S. futures were seen extending the losses experienced in the previous session and on the back of negative sentiment overseas on Friday.
As I had stated, “the RegMed sector suffers the tourist routine … most traders are pumping to buy and dumping to sell. These same trading/buyers/sellers can also be very fickle as their purchasing habits are often based on emotion, not an investment strategy but, a short-lived visit.”
I always want to know what happened PRIOR to what might happen today – it sets a tone of consequence:
From Thursday’s night’s newsletter: “crash and smash as the sector implodes again. The NASDAQ dived -1.81% with the IBB finding a new low -2.79% … with 3 negative dives in 4 sessions in October and Q3 results haven’t even started.”
Of the 45 companies covered on Thursday; 35 downside equities finished in a range of -0.56% (CLLS) to -10.85% (AST -$0.14) while 8 upside equities oscillated from +0.23% (STML) to +51.52% (HSGX) with 2 flat close (CUR and RENE.L).
- Volume is still low … look at the depth of the upside $0.03 (ATHX) to $0.34 (AGTC) – 5 out of 10 had higher volume while the downside imploded $0.01 (PSTI) to $5.84 (SAGE) while 21 had greater volume out of 35.
The iShares NASDAQ Biotechnology (IBB): a week’s history lesson; for a five session aggregate of -3.28% - consider a dramatic upside move!
- In 4 sessions in October – there were 3 negative closes and 1 positive close
- In 19 sessions in September – there were 10 negative closes and 9 positive close;
- In 21 August sessions – 6 had negative and 15 had positive closes
Companies in my headlights – It’s your decision; I provide an idea and context:
Applied Genetic technologies (AGTC) closed up +$0.34 to $6.92 after Wednesday’s $6.58, Tuesday’s $6.70, Monday’s $6.85 and last Friday’s $7.30 having seen $3.90 on 9/14 and 13. An upside can NOT be defined by a comparable’s rise (Nightstar Therapeutics <NITE>) which was down -$0.71 or -3.81% to $17.93 – at least they had data which is STILL elusive for AGTC – Maintaining SELL;
bluebird bio (BLUE) closed down -$3.32 to $140.68. BLUE announced this a.m. that the European Medicines Agency (EMA) accepted its marketing authorization application (MAA) for its investigational LentiGlobin™ gene therapy for the treatment of adolescents and adults with transfusion-dependent β-thalassemia (TDT) and a non-β0/β0 genotype. LentiGlobin was previously granted an accelerated assessment by the Committee for Medicinal Products for Human Use (CHMP) of the EMA in July 2018, potentially reducing the EMA’s active review time of the MAA from 210 days to 150 days – BUY;
Histogenics (HSGX) closed up +$0.34 or +51.52% to $1.00 (day’s range of $0.67 to $1.43) with 45.65 M shares traded <3 month average = 920.1 K shares>. The share pricing percentage (%) had appreciated up to +100%. HSGX announced an OFFERING with a negative aftermarket of -$0.36 or -36.01% … Canaccord Genuity LLC and BTIG, LLC are acting as the joint book-running managers for the offering. WHAT was being leaked to stimulate an upside? The SEC, MA Secretary of State and NASDAQ need to investigate before this offering is initiated – SELL;
Athersys (ATHX) closed up another +$0.03 to $2.16 after Wednesday’s +$0.02 to $2.13 after Tuesday’s $2.11, Monday’s $2.16 and last Friday’s $2.10 having started September at $2.06, seeing a high of $2.06 and a low of $1.86. August opened at $2.00, fell to $1.98; saw a high of $2.06 and a low of $1.87. What has ATHX done for investors – a whole lot of NOTHING - Maintaining SELL;
BioLife Solutions (BLFS) closed down -$0.48 to $13.41 after Wednesday’s -$2.62, Tuesday’s -$0.66, Monday’s -$0.33 and last Friday’s $17.50, following the previous Thursday’s $17.23– we will see an incline as BLFS preliminary revenue from sales of media products reached $5.3 million (after Q2’s $5.2M) while the 52 week change slips to +141.15. I still think it is OVERBOUGHT with another negative aftermarket indication of -$0.26 or -1.94% – Maintaining SELL;
CRISPR Therapeutics (CRSP) closed down -$1.44 to $37.56 after Wednesday’s -$0.72 to $39.00, Tuesday’s -$2.62 to $39.72, Monday’s -$2.01 to $42.34 having ended September at $44.35. There is still room for downside as to the 52 week change of -103.23% Oversold –TRADE;
Verastem Oncology (VSTM) closed down -$0.21 to $6.80 after Wednesday’s +$0.34 to $7.01 after Tuesday’s +$0.16 to $6.67, Monday’s -$0.74 to $6.51 with a FDA approval and Chinese collaboration has been subjected to trading pressures and OVERSOLD and has an aftermarket indication of +$0.29 or +4.26% - Maintaining BUY;
Vericel (VCEL) closed down -$0.54 to $14.38 after Wednesday’s +$0.92 to $14.92, Tuesday’s $14.00 and Monday’s $13.95 having closed in September’s $14.15 having seen a high of $14.80 and a low of $11.65. Eliminating a comparable and a competitor – Histogenics (HSGX); I still believe that VCEL’s share pricing is too “long-in-the-tooth” as Q3 results tend to be seasonal. I am concerned about whether the channel has been stuffed in the last quarters (my opinion). One more point, there is a 52 week change of +181.51%, so there is room for the downside – 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.
