June 27, 2019 8:02am

When offerings are announced and linger without pricing, they suffer the consequences of downward pricing suppression

Global Blood Therapeutics (GBT) closed down -$0.86 on Tuesday, announced a $230 M offering and closed Wednesday down -$8.33 or -13.34% to $54.10 as pricing is announced at $what of 3.375 M shares. Come on Cantor Fitzgerald – annunciate!

Pre-open indications: the oversold are praying for sunlight

Expectation is the word for 2019 – meeting the unknowns with soon to be knowns will be the subject of investing decisions through the rest of the year

 

Who do you call for “share side” assistance?  It’s not AAA … try RMi as the sector and indexes consistently rise and fall over the short-term with alternating volatility and involuntary momentum contraction.

 

Dow futures are DOWN -0.11% (-29 points), S&P futures are UP +0.10% (+3 points) and NASDAQ futures are UP +0.20% (+15 points) - so far ...

 

U.S. stock index futures were fluctuating Thursday morning amid hopes of trade talks;

European stocks traded cautiously higher with the pan-European Stoxx 600 nudged 0.2% higher at the start of the morning session;

Asia Pacific stocks rose amidst trade deal optimism;

 

Data docket: a third reading of first-quarter GDP (gross domestic product), GDP prices, and the latest weekly jobless claims figures will be released at 8:30 a.m. ET. Pending home sales for May and Kansas City Fed survey data for June will follow slightly later in the session.

 

Henry’omics:  

It’s all about macro outcomes (trade deals) that seem to determine the temperature of the sector.

The oversold need to be picked from the vine, there is just too much “red” on my screen of 45 covered companies – it’s been six (6) days of downside tears; yesterday the sector was positive until the last few hours.

  • Wednesday closed NEGATIVE with 32 decliners, 10 advancers, 1 flat and 2 acquired (AST & OSIR);
  • Tuesday closed NEGATIVE with 21 decliners, 20 advancers, 2 flats and 2 acquired (AST & OSIR);
  • Monday closed NEGATIVE with 35 decliners, 7 advancers, 1 flat and 2 acquired (AST & OSIR);
  • Friday closed NEGATIVE with 19 decliners, 22 advancers, 2 flats and 2 acquired (AST & OSIR);
  • Last Thursday closed NEGATIVE with 29 decliners, 14 advancers, 0 flat and 2 acquired (AST & OSIR);
  • The previous Wednesday closed NEGATIVE with 26 decliners, 15 advancers, 2 flat and 2 acquired (AST & OSIR);

A sign if the decliners were at least reducing their numbers but, NO they jumped!

 

From Wednesday night’s post, “some revival, into another bottom the sector fell, even curbing my expectation. Volume and any strength splashed, taking the Advance/Decline (A/D) line with it as sentiment drained any recovery for six (6) sessions in a row of my 45 covered “rebels”.

  • The NASDAQ was up +25.25 points or +0.32% to 7,909.97;
  • The close was negative with an A/DL of 10/32 and 1 flat and 2 acquired;
  • The range of the 10 upside was +0.42% (RARE) to +5.34% (PSTI +$0.03) while the 32` downside ranged from -0.14% (CRSP) to -13.34% (GBT);
  • 4 out of the 10 upside had higher than the 3 month average volume;
  • 6 out of the 32 downside had higher than the 3 month average volume
  • The iShares NASDAQ Biotechnology (IBB) indicator: Wednesday closed down -1% after Tuesday closed down -0.21% and Monday closed down -2.13% - three (3) sessions -3.44%;

 

Q2/19 so far:

  • In June, there were 7 positive, 1 neutral and 10 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:

I am NOT feeling it – so what is the catalyst of share pricing propulsion … just another trade as the machines and algorithms “rule”?

Slim pickings or a feast (?) – I will drink the wine and stumble cautiously.

 

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.