November 5, 2018 7:48am

Could cause fumbling and more sector volatility

Thus I’m back to, “Skim if you can trim, buy if it will fly and sell if compelled!”

Pre-open indication:   1 BUY and 2 SELLs

Quarterly results: Ultragenyx Pharmaceuticals (RARE)

 

Once we get through quarterly LPS (loss-per-share) financial results <notice I didn’t say – <earnings season>, it will be easier for investors to possibly recognize a short or a near-term view; but my fear is that Q4 numbers aren't going to look much better than the Q3/18 numbers – look at the few who are putting-up nine (9) month numbers.

U.S. stock index futures are anticipating a cautious open

Dow futures are UP +0.01% (+2 points) and NASDAQ futures are DOWN -0.03% (-2 points)

 

U.S. stock futures pointed to an uncertain open on Monday as investors are focused on the upcoming midterm elections.

  • Another round of sanctions on Iran come into effect on Monday, and Iran has not taken kindly to Washington's economic pressure on the country causing some international market trepidation.

European markets were mixed,

Asia Pacific markets traded lower as investors remained cautious over global growth prospects

 

Data docket: PMI at 9:45 a.m. ET and ISM non-manufacturing figures are due to be released at 10 a.m. ET

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is indicating a POSITIVE +0.13% UPSIDE 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 NOT indicating in Monday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.08% DOWNSIDE in Monday’s pre-open

 

Henry’omics:

Today is a measurement Monday – with a question whether the sector will be sold into as five (5) sector participants report Q3 on Tuesday, four (4) on Wednesday and seven (7) on Thursday!

This week’s follow-on question is … what will be the impact upon Q4’s pricing lines – there could be a lot to catch-up with having felt the downside for so long … IF Q3 hits share pricing that hard!

My expectation is we will see more lows than spurts to the upside unless … positive news is involved.

 

From Friday’s night’s newsletter: “ending the week is a topping process and has its limitations. Investors need to be more tactical going forward as optimism seems to be fading. As I had stated, “Appreciate these few upside days as the next weeks of quarterly result announcements could DRAW SOME BLOOD.” And, you saw why Friday!”

Next week initiates ATHX Q3 reporting on Tuesday,  11/6 followed by Vericel (VCEL), Ions Pharmaceuticals (IONS), Spark Therapeutics (ONCE), Verastem (VSTM).

… Wednesday highlights reporting from Histogenics (HSGX) with Alnylam Pharmaceuticals (ALNY), Regenxbio (RGNX), Editas Medicine (EDIT) and Voyager Therapeutics (VYGR) on 11/7.

… Followed on Thursday by Histogenics (HSGX), BioTime (NTSEMKT: BTX), Applied Genetic Technologies (AGTC), Intrexon (XON), BioLife Solutions (BLFS), Caladrius Bioscience (CLBS) and Biostage (BSTG) on Thursday (11/8)

 

“The iShares NASDAQ Biotechnology (IBB) in a week’s history lesson; a five session aggregate of a positive +3.22% after 2 downside sessions out of 5!

  • In 2 session in November – there was 2 positive closes;
  • In 23 sessions in October – there were 17 negative closes and 6 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

Friday's closing UPSIDE indicators – increasing volume:

  • Review the range of the 22 upside from +0.15% (ALNY) to +8.38% (FATE) while the 20 downside ranges from -0.19% (VSTM) to -25.59% (ADVM) with 3 flat closes (ATHX, ONVO and RENE.L).

KEY stat:

  • 5 out of 22 of the upside had higher (than the 3 month average) volume
  • 8 out of the 20 downside experienced greater volume (than the 3 month average).

 

Companies in my headlights – It’s your decision; I provide an idea and context:

bluebird bio (BLUE) closed up +$2.54 to $132.69 after Wednesday’s +$15.46 or +13.47% to $130.15 with a negative -$0.15 or -0.12% aftermarket indication after Wednesday’s $114.70, Tuesday’s $110.87 and Monday’s $104.65 following the previous Friday’s $111.72 – that’s a $28,19 or a +22% premium in five (5) sessions – Maintaining SELL;

Fate Therapeutics (FATE) closed up +$8.84 to $14.75 with 1.726 N shares traded <3 month average = 645.6 K shares> after Wednesday’s $1.15 or +9.23% to $13.61 with 891.shares traded FATE had a Q3 loss of $0.31 per share versus the estimate of a loss of $0.24, compared to loss of $0.26 per share a year ago. These figures are adjusted for non-recurring items; representing an earnings surprise of -29.17%. FATE posted revenues of $1.03 M missing estimate by -72.98%, compares to year-ago revenues of $1.03 M.  FATE’s shares have added about +103.9% since the beginning of the year. What concerned me was the report of a balance sheet number: accounts payable and accrued expenses = 14.97 M – Maintaining SELL;

Sage Therapeutics (SAGE) closed flat at $137.55 which traded was haled on great news of its FDA approval of Zulresso after Wednesday’s +$8.87 or +6.89% to $137.55. SAGE’s stock had been halted pre-market ahead of a joint meeting of the U.S. FDA’s Psychopharmacologic Drugs Advisory Committee and Drug Safety and Risk Management Advisory Committee to discuss its Zulresso treatment for postpartum depression. The meeting is scheduled for 8.00 a.m. ET to 5.00 p.m. - 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.