October 17, 2018 8:11am
We could be seeing some siphoning of upside value
Pre-open indications: 2 BUYs, 3 SELLs and 3 TRADEs
I post about “indication intelligence” devoting my time to collection and analysis of information in the perception of sector vulnerabilities and strengths – it’s more than opinion, some facts in evidence need to be recognized!
U.S. stock index futures are fragile and weakening
Dow futures are DOWN -0.41% (-106 points) and NASDAQ futures are DOWN -0.42% (-31 points)
U.S. stock index futures pointed to a negative open Wednesday, taking a breather from the strong performance on Tuesday after better-than-expected corporate earnings.
European markets higher amid earnings;
Asia stocks rise on the back of an overnight bounce
Data docket: mortgage applications are expected at 7 a.m. ET, followed by housing start numbers for September are expected at 8:30 a.m.
Today’s indications:
- The iShares Nasdaq Biotechnology (IBB) is indicating a NEGATIVE -0.11% 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 NEGATIVE -0.32% DOWNSIDE in Wednesday’s pre-open
Henry’omics:
Today’s weakness follows a strong trading day where sector equities exceeded expectation with a previous session’s Advance/Decline Line of 39/4 and 2 flats.
We have seen the lows for much of the month and I wonder whether indexes and markets have just “petered” out as investors continue to digest global political developments and react to a spate of corporate earnings – not “our” sector which don’t start until October 25th .
Minutes from the Federal Reserve’s September meeting, at which they raised interest rates, were expected around 2 p.m. ET Wednesday. Minutes aren’t ordinarily a source of volatility, however, the outsize focus on Treasury rates — notably a rise in the yield on the 10-year Treasury note to a seven-year high last week — that can raise corporate and individual borrowing costs may make a more detailed account of last month’s policy convention slightly more intriguing.
NOT to lose sight of the upcoming session – sector stocks could be down as share pricing diminishes; I’m still stressing a defensive mode adding little if any BUYs to any offensive moves.
From Tuesday’s night’s newsletter: “the thundering indexes rolled-up the oversold.”
The iShares NASDAQ Biotechnology (IBB): a week’s history lesson; for a five session aggregate of -0.14% after 2 negative sessions out of 5!
Of the 45 companies covered on Tuesday; 4 downside equities finished in a range of -0.87% (CLBS) to -5.77% (CUR) while 39 upside equities oscillated from +0.57% (MDXG) to +10.31% (CRSP) with a 2 flat close (ONVO and RENE.L).
Volume has been increasing … look at the depth – 18 out of 39 of the upside had higher (than the 3 month average) volume while the downside experienced 3 having greater volume (than the 3 month average) out of 4.
- In 12 sessions in October – there were 9 negative closes and 3 positive closes
- 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:
Aduro Biotechnologies (ADRO) closed up +$0.44 to $6.83 with a negative -$0.03 or -0.44% aftermarket indication. October opened at $7.18, falling to a low of $5.95 while last Friday closed at $6.08. Volume is stronger enough to be sold into – SELL;
bluebird bio (BLUE) closed up +$5.73 to $130.51 and has a positive +$1.02 or +0.78% aftermarket indication after last week’s range which started at $133.26 and ended Friday at $126.09 with Monday’s down fall to $124.78. At the equities’ “fairground”, the teacups are still spinning - BUY
BioLife Solutions (BLFS) closed up +$0.88 to $13.17 and has a positive +$0.41% or +3.11% indication. Professionally, the numbers speak but, remember BLFS is up in a 52 week change of +113%; personally I still believe it is OVERBOUGHT – BUY;
Biostage (BSTG) closed up +$0.15 to $3.10 after Friday’s close of $2.90, October starting at $3.20 and a low of $2.80. It’s a day trading “sandbox, a pre-clinical trap, NO IND or even being in-sight of a filing, a questionable management team and a share pricing that has a foundation of short dollar “raises” with NO rational valuation determination. It’s worth maybe a $1.50 in regard to its pre-clinical status and low cash value and a decimated board of directors (BOD) of two long-term directors – WHY did they exit? My OPINION, there are VERY serious TRANSPARECY issues re their most recent BOD additions of two non-resident Chinese nationals and a third as its new President who have executed multiple small dollar placements with unwarranted/non-supportive upside pricing based on questionable (what model) valuation – Maintaining SELL;
CRISPR Therapeutics (CRSP) closed up +$3.70 to $39.60 and has a negative -$0.09 or -0.23% aftermarket indication. October opened at $42.34, saw a high of $42.34 and a low of $35.90 while September opened at $55.50 and ended at $4.35. CRSP also has a 52 week change of +96.17% making “room” for downside movement – Trade;
Editas Medicine (EDIT) closed up +$1.96 to $29.06 yet has a negative -$0.06 or -0.21% aftermarket indication. September opened at $30.47, saw a low of $30.01 and a High of $33.19 and ended the month at $31.82 – Trade;
Intellia Therapeutics (NTLA) closed up +$2.18 to $24.53 having opened at $27.13, seeing a high of $27.13 and a low of $22.30. NTLA looks stronger than its two (2) neighbors (CRSP and EDIT) and has a 52 week change of -18.87%, thus “room” for upside – Trade;
Vericel (VCEL) closed up +$0.37 to $12.59October opened at $13.95, saw a low of $12.22 and a high of $14.92 - so far. Professionally, the numbers speak but, remember VCEL is up in a 52 week change of +165.65%; personally I still believe it is OVERBOUGHT – 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.
