March 24, 2020 5:08pm
Technically speaking, sentiment is being re-established as an indicator
Still a question, has a resistance line been officially recognized?
Pre-open indications: 7 HITs < (ALNY +$0.88), ATHX -$0.05), (BLFS +$0.59), (BLUE +$1.80), (IONS +$3.00), (VCEL +$0.07) >; Sold into strength < (RGNX +$2.83)> and 0 MISS
Market talk, ideas and opinions: anyone puzzled by the most recent sector moves has reason for feeling so; volatility sketches a contradictory picture of the short-term
The Dow closed UP +2112.98 points (+11.37%), the S&P closed UP +209.93 points (+9.38%) while the NASDAQ closed UP +557.18 points (+8.12%)
Indexes rebounded aggressively from a three-year low on Tuesday as investors hoped U.S. lawmakers were close to an agreement on a stimulus bill to rescue the economy from the damage caused by the coronavirus.
For the year to date though, the Dow is down 27.45%, the S&P 500 has lost 24.25%, and the Nasdaq is 17.33% lower.
- President Trump floated the idea of restarting the economy soon to limit the damage to small and medium-size businesses, a notion that has run against the advice of his coterie of health advisers. That idea may partly be heartening some staunch stock-market bulls, despite the implications of more rapid spread of the illness and a higher death toll.
- Meanwhile, reports that the outbreak was peaking in Europe also offered some glimmers of hope for market bulls. Indeed, both new cases and deaths have dropped for two days in Italy, and the head of Germany’s public health institute said the infections rate in Europe’s largest economy was leveling off. <MarketWatch>
The CBOE Volatility Index (VIX) tracked up on Tuesday +0.18 or +0.32% at 61.88 after Monday’s -4.45 points or -6.74% at 61.59 as compared to Friday -5.96 points or -8.28% at 66.04. Last week, the VIX eclipsed its financial crisis high, closing at 82.69.
The number of confirmed U.S. coronavirus cases has surged to at least 46,500 while the death count has broken at least 590. <John Hopkins University>
The sector’s Advance/Decline (A/D) line opened at 33/1 and 1 flat, met the mid-day without change at 33/1 and I flat and closed positive at 32/2.
However, there is still a mountain of volatility to sustain – to me a BAD sign.
The recent share pricing “violence” in the market action has left scars on most investors and it will take a lot more than one day of sharp inclines as the worst is NOT over.
Glad to see some of my favorites – other than those mentioned in the top 10 incliners:
- Applied Genetic Technologies (AGTC +$0.13),
- Mesoblast (MESO +$0.28),
- Verastem (VSTM +$0.22),
- Voyager Therapeutics (VYGR +$1.31)
While those on my DISDAIN list are all decliners (mentioned below)!
U.S. benchmarks rallied in the wake of an historic early-2020 market downdraft.
Technical damage has been inflicted and today’s corrective bounce was overdue —but, it does NOT mean today’s rally supports a short-term repair!
To be supportive of this market and “our” universe of cell and gene therapy sector, a retest of is needed from underneath, to validate the follow-through.
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB closed up +5.25% and XBI also closed up +8.11%
- Monday, the IBB closed down -0.55% and XBI also closed down -0.80%
- Friday, the IBB closed down -3.02% and XBI also closed down -1.45%
The advance/decline line scenario of 35 covered companies:
- Tuesday, the close was positive with an A/D line of 32/3, 0 flat of 35 covered;
- Monday, the close was negative with an A/D line of 15/20, 0 flat of 35 covered;
- Friday’s close was negative with an A/D line of 11/23, 1 flat of 35 covered;
Tuesday’s (top 10) incliners:
- ReNeuron (RENE.L +$24.50 after Monday’s -$7.00);
- Global Blood Therapeutics (GBT +$4.28);
- Regenxbio (RGNX +$3.64 after Monday’s +$0.38, Friday’s +$1.89, Thursday’s +$4.31 and Wednesday’s -$5.34);
- Ultragenyx (RARE +$3.36 after Monday’s +$0.76, Friday’s-$0.87, Thursday’s +$3.30 and Wednesday’s -$2.56),
- Ionis Pharmaceuticals (IONS +$3.23 after Monday’s -$1.98, Friday’s -$2.49 and Thursday’s +$2.61);
- Sage Therapeutics (SAGE +$3.21);
- CRISPR Therapeutics (+$3.21 after Monday’s +$0.58);
- uniQure NV (QURE +$2.52 after Monday’s -$2.10 after Friday’s -$0.69);
- Editas Medicine (EDIT +$2.12 after Monday’s +$0.50, Friday’s -$0.92, Thursday’s +$1.71 and Wednesday’s +$1.51);
- Fate Therapeutics (FATE +$1.62);
Tuesday’s (only 3) decliners:
- Biostage (BSTG -$0.20);
- MiMedx (MDXG -$0.20);
- Athersys (ATHX -$0.05);
The percentage (%) indicators:
- Tuesday’s the range of the 32-upside was +0.43% (BCLI) to +32.45% (RENE.L) while the 3-downside ranged from -2.56% (ATHX) to -6.06% (MDXG);
- Monday’s the range of the 15-upside was +0.43% (BCLI) to +10.64% (FIXX) while the 20-downside ranged from -0.16% (GBT) to -22.71% (PGEN);
- Friday’s range of the 11-upside was +0.54% (VSTM) to 55.03% (BSTG) the 23-downside ranged from -0.21% (FIXX) to -22.97% (BLFS);
Upside volume stats: key numbers
- Tuesday: 15 out of the 32-upside had higher than the 3-month average volume;
- Monday: 3 out of the 15-upside had higher than the 3-month average volume;
- Friday: 7 out of the 11-upside had higher than the 3-month average volume;
Downside volume stats:
- Tuesday: 1 out of the 3-downside had higher than the 3-month average volume;
- Monday: 10 out of the 20-downside had higher than the 3-month average volume;
- Friday: 20 out of the 23-downside had higher than the 3-month average volume;
Tuesday closed positive with 3 decliners, 32 advancer and 0 flat
Monday closed negative with 20 decliners, 15 advancer and 0 flat
Friday closed negative with 23 decliners, 11 advancer and 1 flat
Thursday closed positive with 5 decliners, 30 advancer and 0 flat
Wednesday closed negative with 25 decliners, 10 advancer and 0 flat
Tuesday closed positive with 9 decliners, 26 advancer and 0 flat
Monday closed negative with 34 decliners, 1 advancer and 0 flat
Friday closed positive with 6 decliners, 29 advancers and 0 flat
Thursday closed negative with 33 decliners, 2 advancers and 0 flat
Wednesday closed negative with 32 decliners, 2 advancers and 1 flat
Tuesday closed positive with 10 decliners, 24 advancers and 1 flat
Monday closed negative with 32 decliners, 3 advancers and 0 flats
Friday closed negative with 29 decliners, 4 advancers and 2 flats
Thursday closed negative with 24 decliners, 11 advancers and 2 flats
Wednesday closed positive with 3 decliners, 30 advancers and 2 flats
Tuesday closed negative with 26 decliners, 7 advancers and 2 flats
Monday closed positive with 11 decliners, 24 advancers and 0 flats
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.