July 2, 2020 7:23pm

Fundamentals need to be not forgotten; how fast will being overbought get wrenched back to oversold-itis

Pre-open indications: 8 HITs and 2 MISS

Financing news: BioLife Solutions (BLFS) sold 5.175 million shares at $14.50, allowing it to raise approximately $75 million. The underwriters have a 30-day option to purchase an additional 776,250 shares, which could provide an additional $11.3 million. Considering that BLFS closed at $17.98, the option will likely be executed.

A shortened week in review …

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The Dow closed UP +92.39 points (+0.36%), the S&P closed UP +14.15 points (+0.45%) while the NASDAQ closed UP +53 points (+0.52%)

 

Pre-open indication results: 8 HITs <Biostage (BSTG -$0.00), Applied Genetic Technologies (AGTC +$0.60), AxoGen (AXGN -$0.24) SELL into strength: Fate Therapeutics (FATE +$0.07), Global Blood Therapeutics (GBT -$2.61), Regenxbio (RGNX -$0.65), Vericel (VCEL +$0.24), ReNeuron (RENE.L +$0.00)> and 2 MISS  <BioLife Solutions (BLFS +$1.94), CRISPR Therapeutics (CRSP +$1.20), >

 

Henry’omics:

Indexes rose following a better-than-expected U.S. jobs report as the economy tries to recover from the coronavirus pandemic.

Thursday started the session with sharp gains after the government reported that a record 4.8 million jobs were created in June. Economists were expecting 2.9 million jobs were created. The unemployment rate fell to 11.1% from 13.3% in May as economists were expecting a rate of 12.4%.

  • The Labor Department also said, however, that initial jobless claims rose by 1.427 million in the week ending June 27.
  • Economists expected initial U.S. jobless claims to rise by another 1.38 million, down from 1.48 million the week earlier.
  • The data also showed the number of continuing claims — the number of people receiving unemployment benefits for consecutive weeks — rose to 19.29 million, an increase of about 59,000.

Thursday’s gains led to strong weekly performances for the major averages.

  • The Dow rose 3.3% this week and the S&P 500 climbed 4% in the same time period.
  • It was the Dow and S&P 500′s biggest weekly gains since June 5.
  • The Nasdaq posited its best weekly performance since May 8, jumping 4.6% this week. U.S. markets will be closed on Friday for the July Fourth holiday. <CNBC>

 

RegMed/Cell and Gene therapy 35 covered equities’ Advance/Decline (A/D) lines: progressions and regressions …

  • Thursday opened positive at 22/11 and 2 flats, stayed positive at the mid-day at 21/11 and 3 flats, closing positive at 18/14 and 3 flats;
  • Wednesday (7/1) opened positive at 18/13 and 4 flats, stayed positive at the mid-day at 22/10 and 3 flats, closing positive at 24/7 and 4 flats;
  • Tuesday opened neutral at 16/16 and 3 flats, flipped negative at the mid-day at 15/17 and 3 flats, closing positive at 21/11 and 3 flats;
  • Monday opened positive at 21/12 and 2 flats, flipped negative at the mid-day at 13/20 and 2 flats, closing negative at 10/23 and 2 flats;

 

Key metrics:

  • Sector volume was LOW with 4 of the 18-upside having higher than the 3-month average volume and 3 out of the 14-downside having higher than the 3-month average volume;
  • Thursday’s percentage (%) of the 18-upside were +0.000% (BSTG) to +12.09% (BLFS) while the 14-downside ranged from -0.48% (BLCM) to -7.59% (MDXG); 

 

Hammered in today’s market:

  • Global Blood Therapeutics (GBT), bluebird bio (BLUE), UniQure NV (QURE); Regenxbio (RGNX) and MiMedx (Pink sheets: MDXG), to name 5 of the 14 declining of the 35 covered

Jumping with share pricing momentum:

  • BioLife Solutions (BLFS), Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP), Ultragenyx Pharmaceuticals (RARE) and Brainstorm Cell Therapeutics (BCLI) to name 5 of the 18 trading up of 35 covered

 

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Thursday, the IBB closed up +0.85% and XBI also closed up +0.37%
  • Wednesday, the IBB closed up +0.50% and XBI also closed up +0.46%
  • Tuesday, the IBB closed up +1.49% and XBI also closed up +1.40%
  • Monday, the IBB closed down -0.36% and XBI also closed down -0.02%

 

Thursday’s (10 of 18) incliners:

  • BioLife Solutions (BLFS +$1.94 after Wednesday’s -$0.31 and Tuesday’s +$1.05);
  • Ultragenyx Pharmaceuticals (RARE +$1.39 after Wednesday’s +$6.43, Tuesday’s +$4.56 and Monday’s -$2.92);
  • CRISPR Therapeutics (CRSP +$1.20 after Wednesday’s +$5.01, Tuesday’s -$1.56 and Monday’s +$1.01);
  • Alnylam Pharmaceuticals (ALNY +$1.10);
  • Brainstorm Cell Therapeutics (BCLI +$1.01 after Wednesday’s-$0.02);
  • Applied Genetic Technologies (AGTC +$0.60);
  • Ionis Pharmaceuticals (IONS +$0.59 after Wednesday’s +$1.24 after Tuesday’s -$0.44 and Monday’s -$0.69);
  • Cellectis SA (CLLS +$0.59);
  • Mesoblast (MESO +$0.46);

Thursday’s (bottom 10 of 14) decliners:

  • Global Blood Therapeutics (GBT -$2.61 after Wednesday’s +$7.31, Tuesday’s -$3.37 and Monday’s +0.94);
  • bluebird bio (BLUE -$1.52);
  • uniQure NV (QURE -41.52 after Wednesday’s +$1.15, Tuesday’s -$0.67, Monday’s -$0.75),
  • Regenxbio (RGNX -$0.65 after Wednesday’s +$1.92, Tuesday’s -$0.13 and Monday’s -$1.13);
  • Voyager therapeutics (VYGR -$0.44);
  • MiMedx (OTC Pink sheets: MDXG -$0.41);
  • Sage Therapeutics (SAGE -$0.34 after Wednesday’s +$1.77 and Tuesday’s -$0.19);
  • Editas Medicine (EDIT -$0.32 after Wednesday’s +$1.27, Tuesday’s +$0.24 and Monday’s +$0.42);
  • Adverum Biotechnologies (ADVM -$0.26);
  • AxoGen (AXGN -$0.24 after Wednesday’s +$2.49 after news of financing);

Closing flat: 3 –Aduro Biotech (ADRO), ReNeuron (RENE.L) and Stemline Therapeutics (STML – being acquired)

 

Percentage (%) movement/range statistics: look closely … notice percentage (%) movements are declining

  • Thursday’s percentage (%) of the 18-upside were +0.000% (BSTG) to +12.09% (BLFS) while the 14-downside ranged from -0.48% (BLCM) to -7.59% (MDXG); 
  • Wednesday’s percentage (%) of the 24-upside were +0.14% (ADVM) to +26.84% (AXGN) while the 7-downside ranged from -0.23% (BLUE) to -4.17% (ATHX); 
  • Tuesday’s percentage (%) of the 21-upside were +0.14% (ALNY) to +6.86% (BLFS) while the 11-downside ranged from -0.35% (RGNX) to -6.42% (AGTC); 
  • Monday’s percentage (%) of the 10-upside were +0.46% (SGMO) to +9.18% (ADVM) while the 23-downside ranged from -0.14% (SAGE) to -12.40% (BCLI); 

 

Sentiment and a few daily indicators:

The Thursday’s moves followed the market’s first trading day in Q3. Both the S&P and Nasdaq gained during the regular session on Wednesday, with the latter jumping more than 1% to an all-time high.

Contributing to the declining (from open) sessions, early efforts to restart business activity have been uneven and been met by reversals of social-distancing restrictions in a number of Southern and Western U.S. states, including Florida, Texas and California.

  • Thursday 2.7 million
  • Wednesday 2.63 million
  • Tuesday 2.68 million
  • Monday 2.54 million

Thursday’s death rate totaled 128,421 after Wednesday’s 127,425 after Tuesday’s 129.545, Monday’s 125,803 after last Friday’s 124,468, <Johns Hopkins University>

 

Upside volume stats: 

  • Thursday: 4 out of the 18-upside had higher than the 3-month average volume;
  • Wednesday: 6 out of the 24-upside had higher than the 3-month average volume;
  • Tuesday: 6 out of the 21-upside had higher than the 3-month average volume;
  • Monday: 5 out of the 10-upside had higher than the 3-month average volume;

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Thursday was down -0.94 points or -3.28% at 27.68;
  • Wednesday was down -1.81 points or -5.95% at 28.62;
  • Tuesday was down – 1.35 points or -4.25% at 30.43;
  • Monday was down -2.95 points or -8.49% at 31.78;

Downside volume stats:

  • Thursday: 3 out of the 14-downside had higher than the 3-month average volume;
  • Wednesday: 0 out of the 7-downside had higher than the 3-month average volume;
  • Tuesday: 4 out of the 11-downside had higher than the 3-month average volume;
  • Monday: 4 out of the 23-downside had higher than the 3-month average volume;

 

July

Thursday closed positive with 18 advancers, 14 decliners and 3 flats

Wednesday (7/1) closed positive with 24 advancers, 7 decliners and 4 flats

 

The Bottom line:  The RegMed, cell and gene therapy sector wrapped - up Q2.

I don't usual but, yet again I am repeating myself, “I am always espousing CAUTION, a lot of optimism is priced into current pricing.  I’m also worried about earning releases as August approaches, so let July roll but, keep your canteen full and powder dry!”

A quote from MarketWatch, “The stock market has been detached from economic reality. Investors, drunk with “hopium,” bored at home and unable to bet on sports, have turned the stock market into a casino.”

Some are of the same ilk … WHAT will BREAK resistance lines? As RSI (relative strength index) is at overbought levels and “smart money” will be selling near and around these highs.

Don’t DUMP your whole positions for July to same old theme and different session: “Skim if you can trim, buy if it will fly and sell if compelled!”

Earning’s season could be VERY volatile!

 

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.