December 16, 2019 8:38am
Pre-open indications: the return of the oversold
News: Organovo Holdings (ONVO) and Tarveda Therapeutics (a privately-held company) announced a merger under which Tarveda would emerge as a wholly-owned subsidiary of ONVO in an all-stock transaction. Upon completion of the merger, the merged company would operate under the name Tarveda Therapeutics and trade on the Nasdaq Stock Market LLC under the ticker symbol "TVDA."
Don’t get too comfortable; a problem, share pricing strength is a future enemy. Momentum with increased volume will encroach on share pricing’s upside; if you were a subscriber … you would understand why!
We crave explanations because they give us an illusion of control
Dow futures are UP +0.21% (+58 points), S&P futures are UP +0.45% (+14 points) and NASDAQ futures are UP +0.53% (+45 points)
Dow, S&P and NASDAQ futures indicate a positive open;
European stocks traded higher with the pan-European Stoxx 600 added 1.1% by mid-morning to surpass 416.6 and hit an all-time high;
Asia Pacific stocks were mixed with mainland Chinese stocks jumping on the back of better-than-expected industrial output data, while indexes in Japan and Hong Kong edged downwards;
Data Docket: IHS Markit services, manufacturing, and composite PMI (purchasing managers’ index) flash data for December is due at 9:45 a.m. ET.
Indexes are improved by Friday’s announcement of a ‘phase one’ trade agreement between the U.S. and China, which will be inked in January.
Yet, Friday the cell and gene therapy sector slumped driven by profit taking on previous session’s speculation, a few acquisitions and dreams of who was next for the “cart”.
However, some caution remains as details on key aspects of the “China” trade/tariff deal, such as agricultural purchases and the U.S. trade deficit, remain unclear. U.S. although Trade Representative Robert Lighthizer has, however, assured that the deal is “totally done.”
Translate this hazy trade deal specifics to sentiment in “our” cell and gene therapy universe
Last Friday night’s post’s title: “buying the rumors, selling speculation as the sector gets slammed. What’s the theme for markets, face-saving way for the U.S. to show some progress on the trade talks? However, the “numbers speak, the S&P 500 is up +26.4%, the Dow +20.6% and Nasdaq +31.6% for 2019.”
- The NASDAQ closed UP +17.56 points (+0.20%);
- The IBB closed up +0.34% while the XBI closed up +0.54%;
- The range of the 16 upside was +0.012% (RARE) to +7.39% () while the 24 downside ranged from -0.01% (GBT) to -6.66% (BLCM);
- 7 out of the 16 upside had higher than the 3 month average volume;
- 7 out of the 24 downside had higher than the 3 month average volume;
Review the content of Q4’s market:
- December register 5 negative and 5 positive closes … so far
- November registered 1 holiday, 12 positive and 8 negative close;
- October registered 10 positive, 1 neutral and 14 negative closes;
Companies in my headlights – It’s your decision; I provide an idea and context:
Pre-open indications: ride the wave but, be prepared for the end result – being overbought and subject to be profiteered
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.