April 2, 2020 8:53am
All types of investors are drained by the current market’s toxic actions after this hop-scotch week, month and quarter; who is willing in their right mind to stay LONG; all I can see is the index boulders loosening on “sentiment mountain”
Pre-open indications: 8 maintaining BUY and 1 SELL into strength
News: Vir Biotechnology (VIR) and Alnylam Pharmaceuticals (ALNY) expanded their broad multi-target existing collaboration for the development and commercialization of RNAi therapeutics for infectious diseases, including SARS-CoV-2, the virus that causes the disease COVID-19 … read more
Who do you call for “share side” assistance? It’s not AAA … try RMi
Dow future are UP +0.69% (+144 points), S&P futures are UP +0.64% (+18 points) and NASDAQ futures are UP +0.55% (+41 points)
U.S. stock futures surged without” limits” this a.m. while waiting for jobs report and watching oil because of its influence over other financial markets;
European stocks fluctuated as markets react to developments related to the coronavirus pandemic in the U.S. and around the world while the pan-European Stoxx 600 bounced either side of the flatline;
Asia Pacific were mixed as global markets continue their rocky start to Q2; Mainland China stocks recovered, Australia fell, South Korea (Kospi) rose while Japan’s indexes declined with the MSCI Asia ex-Japan index rising 0.19%.
Data docket: initial jobless claims report 6.648 million claims versus 3.1 million expected
The coronavirus outbreak, which sent the sector and markets tumbling in Q1 continues to act as a headwind while investors grapple with the ongoing ambiguity around how long the economy will be padlocked by uncertainty.
It’s time for some sunshine after Wednesday’s session slipped into negative territory with an Advance/Decline (A/D) line of 4/31 following Tuesday’s neutral A/D line of 17/17 and 1 flat and Monday’s positive close of 20/15 of the 35 covered companies.
Since Monday, the CBOE Volatility Index (VVIX) has achieved i.e. lost -8.45 points while the IBB lost -1.11% and the XBI lost -4.11% while volume has been extremely low as the sector bounced through a negative, neutral, another negative close following three (3) positive closes. March registered 11 negative, 1 neural and 10 positive closes before April 1st closed negative. It’s time for my signal of the oversold to be recognized.
The BOTTOM LINE: Ask yourself, do you know why you own a RegMed cell and gene therapy equity? What are the catalysts? What's the pipeline look like?
- Do you understand a company’s vision and how many different “fallbacks” it has; so, if something goes wrong in a filing, clinical data comes up short, a desperation of a financing needed at this point in time or the loss of a management team - should it be a factor for an exit;
- After careful examination of how a company achieves clinical initiatives, I have come away more cautious. Having lived through the rise and decline of many companies as well as stock pricing rotations, I am usually better informed on what propels a share pricing’s volume and execution of expectations;
- It’s still about the secret sauce of valuation. Many issues can be forgiven if you can show investors growth.
Wednesday night’s title: “the cell/gene sector baby programs are being disregarded and tossed-out with the bathwater. Volatility has no bounds supplemented by once-in-a-lifetime uncertainty.”
- the NASDAQ closed DOWN – 339.52 points (-4.42%)
- the IBB closed down -3.67% and XBI also closed down -5.40%;
- the close was negative with an A/D line of 4/31, 0 flat of 35 covered;
- the range of the 4-upside was +3.88% (MESO) to +32.67% (ATHX) while the 31-downside ranged from -0.91% (IONS) to -19.12% (PGEN);
- 3 out of the 4-upside had higher than the 3-month average volume;
- 6 out of the 31-downside had higher than the 3-month average volume;
April began with 1 negative close
- March registered 11 negative, 1 neutral and 10 positive closes
- February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
- January registered 9 negative, 10 positive closes and 2 holidays.
Companies in my headlights – It’s your decision; I provide an idea and context:
My targets to SELL into strength and volume:
Athersys (ATHX) – after six (6) sessions of price appreciation and strength due to news of partner investment; however, before stem cells can be used in the U.S. to fight the virus, there would have to be clinical trials in this country and approval from the U.S. FDA.
Maintaining targets to BUY:
- bluebird bio (BLUE), Adverum (ADVM), Fate Therapeutics (FATE), Global Blood Therapeutics (GBT), Regenxbio (RGNX), Ionis Pharmaceuticals (IONS) and Sage Therapeutics (SAGE)
BUY on News:
Alnylam Pharmaceuticals (ALNY closed down -$4.31) and Vir Biotechnology (VIR) announced an expansion to their broad multi-target existing collaboration for the development and commercialization of RNAi therapeutics for infectious diseases, including SARS-CoV-2, the virus that causes the disease COVID-19. This expansion includes up to three additional targets focused on host factors for SARS-CoV-2, including ACE2 and TMPRSS2, both of which are considered critical for viral entry,
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.