June 20, 2019 8:01am
Arising from the ashes of yesterday’s trades
Pre-open indications: 2 BUY and 2 SELL
Yesterday’s trend is an admission that the sector is without any pricing sustainability which enhances a value directional; oversold/overbought pick a session and they will flip or flop
Just like algorithms, rules-are-what-we-make-of-them. The take-away, don’t dwell on what’s happened but, lean in on the oversold and undervalued; the question is … who is defining the value – traders or machines?
Dow futures are UP +0.88% (+234 points), S&P futures are UP +0.94% (+28 points) and NASDAQ futures are UP +1.33% (+103 point)
U.S. stock index futures were sharply higher Thursday morning, after the Federal Reserve signaled possible interest rate cuts later this year;
European stocks traded sharply higher as investors await an interest rate decision from the Bank of England as the pan-European Stoxx 600 jumped 0.7% during the morning session to its highest since May 6;
Asia Pacific markets were higher for all the above reasons;
Data docket: weekly jobless claims figures, first-quarter current account data, and the Philadelphia Fed manufacturing survey for June due out at 8:30 a.m. ET. Leading index figures for May will follow slightly later in the session.
What goes down will go up in an endless cycle as many of my covered sector’s (45) companies are the whipping boys of trading.
Reason – sustainability; what supports these share pricing – it’s certainly not news other than indirect headlines of others being acquired and even some of those are mired in a holding pattern …
But, the Fed did speak and - market focus is largely attuned to monetary policy settings, after signaling interest rate cuts beginning as early as July.
From Wednesday night’s post, “Conviction versus confidence inhibits sustainability and never forget sentiment is a subtraction. Volume and percentage (%) of the upside and downside are still weak; a raging battle of my 45 covered companies as they dive and jive while the healthcare sector rose 1%.”
- The NASDAQ was up +33.44 points or +0.42% to 7,987.32;
- The sector close was negative with an A/DL of 15/26 and 2 flats and 2 acquired;
- Wednesday’s range of the 15 upside was +0.13% (BOLD) to +4.40% (VSTM) while the 26 downside ranged from -0.04% (VYGR) to -7.37% (RENE.L);
- 4 out of the 15 upside had higher than the 3 month average volume;
- 4 out of the 26 downside had higher than the 3 month average volume;
- The iShares NASDAQ Biotechnology (IBB) indicator: Wednesday closed up +0.57% after Tuesday closed up +1.38%, Monday’s +2.96%, Friday’s -0.93% and last Thursday’s +0.75% - go with the trend until it “peters-out”;
Q2/19 so far:
- In June, there were 7 positive, 1 neutral and 6 negative close, so far;
- In May, there were 14 negative, 1 holiday and 8 positive closes;
- In April, there has been 10 positive and 11 negative closes;
Companies in my headlights – It’s your decision; I provide an idea and context: post earnings release:
ReNeuron (RENE.L) closed down -$17.50 to $220.00 after Tuesday’s -$5.00 to $237.50, Monday’s -$7.50 to $242.50, Friday’s +$20.00 to $250.00 and last Thursday’s $230.00. RENE.L has been floating on the market’s lows with a U.S. negative-$10.00 or -4.55% indication – Maintaining SELL ;
Vericel (VCEL) closed up +$0.63 to $17.44 after Tuesday’s $16.81, Monday’s $16.51, Friday’s $16.04 and last Thursday’s $16.53. The chart looks likes its time skim the froth, statistically there is a 52 week change of +52.68% and the closer we get to the end of the month (June) as the summer solstice begins and end of the quarter (Q2)- SELL;
Three CRISPRS equities: Intellia Therapeutics (NTLA -$0.23), Editas Medicine (EDIT -$0.29) and CRISPR Therapeutics (CRSP -$1.25) have all experienced the declines and could be ready for the bounce back. It’s not always about being oversold but, a reflex of the downtrodden to rise like the phoenix. Remember, in the market, sector or casino – we are all betters, draw a new card and bluff for the pot – BUY;
Verastem (VSTM) closed up +$0.08 to $1.90 and has a positive +$0.03 or +1.58% aftermarket indication after cancer/gene therapy companies following the announcement of the Pfizer (PFE) – Array BioPharma (ARRY) deal; announced earlier this week, the deal has an enterprise value of approximately $11.4 billion. External influences help as VSTM has been overwhelmed by selling and the pressure upon the share price – 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.