August 3, 2020 5:48pm

Weather the volatility, pare gains and take some “money off the table” as sector earnings’ ramp

Pre-open indication results: 3 HITs and 2 MISS

Q2 earnings: Aduro Biotech (ADRO) reports -$1.66 million or -$0.21 per share loss after restructuring

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The Dow closed UP +236.08 points (+0.89%), the S&P closed UP +23.49 points (+0.72%) while the NASDAQ closed UP +157.52 points (+1.47%)

 

Pre-open indication results: 3 HITS <Biostage (BSTG -$0.37), Homology Medicine (FIXX +$1.10), Mesoblast (MESO +$0.95)> and 2 MISS < Pluristem (PSTI +$1.24), Editas Medicine (EDIT +$2.21),

 

Henry’omics:

Indexes rose on Monday, the first trading day of August, as Wall Street tried to build on its four-month winning streak.

Everyone is “circling” for the July jobs report, which the Labor Department is scheduled to release on Friday.

New highs should make many scared of inflated optimism and speculative markets.

This a.m. I stated in this a.m.’s newsletter - RegMed Investors’ (RMi) pre-open: Albert Einstein’s definition of insanity? https://www.regmedinvestors.com/articles/11483 . “Doing the same thing over and over again” and yet we expect market’s and sector’s appreciation?”

Also, this a.m.’s Biostage (BSTG) Chronicles also offered a warning especially their “art of deceptions” in LOST billing payables and liabilities (?) and accounting practices – one of many indicators.

 

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

  • Monday opened positive at 27/6 and 2 flats, stayed positive at the mid-day at 25/3 and 2 flats, closing positive at 31/1 and 3 flats;
  • Friday opened negative at 9/23 and 3 flats, stayed negative at the mid-day at 6/28 and 1 flat, closing negative at 7/27 and 1 flat;

 

Key metrics:

  • Sector volume was LOW with 8 of the 31-upside having higher than the 3-month average volume and the 1 of 1-downside having higher than the 3-month average volume;
  • Monday’s percentage (%) of the 31-upside were +1.33% (AGTC) to +8.24% (CRSP) while the 1-downside was -14.80% (BSTG); 

 

Hammered in today’s market: the ONLY one

  • Biostage (BSTG) to name 1 of the 1 declining of the 35 covered

Jumping with share pricing momentum:

  • CRISPR Therapeutics (CRSP), Alnylam Pharmaceuticals (ALNY), Ultragenyx (RARE), Global Blood Therapeutics (GBT), Editas Medicine (EDIT) to name 5 of the 31 trading up of 35 covered

 

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

  • Monday, the IBB closed up +3.13% and XBI also closed up +4.20%
  • Friday, the IBB closed down -1.93% and XBI also closed down -2.35%

 

Monday’s (10 of 31) incliners:

  • CRISPR Therapeutics (CRSP+$7.04 after Friday’s -$0.90)
  • Alnylam Pharmaceuticals (ALNY +$6.54 after Friday’s -$5.35);
  • Ultragenyx (+$5.38 after Friday’s +$0.56);
  • Global Blood Therapeutics (GBT +$3.00 after Friday’s -$2.02);
  • Editas Medicine (EDIT +$2.21 after Friday’s -$1.27);
  • bluebird bio (BLUE +$2.08 after Friday’s -$0.59);
  • Fate Therapeutics (FATE +$1.94 after Friday’s -$0.33);
  • Cellectis SA (CLLS +$1.79 after Friday’s -$0.31);
  • BioLife Solutions (BLFS +$1.68 after Friday’s -$0.04);
  • Ionis Pharmaceuticals (IONS +$1.63 after Friday’s -$1.46);

Monday’s (1 of 1) decliners:

  • Biostage (BSTG -$0.37 after Friday’s +$0.40, Thursday’s -$0.49 and last Wednesday’s -$0.01);

Closing flat: 3 – ReNeuron (RENE.L), Solid Biosciences (SLDB) and Stemline Therapeutics (STML – acquired)

 

Percentage (%) movement/range statistics: comparisons

  • Monday’s percentage (%) of the 31-upside were +1.33% (AGTC) to +8.24% (CRSP) while the 1-downside was -14.80% (BSTG); 
  • Friday’s percentage (%) of the 7-upside were +0.72% (RARE) to +19.05% (BSTG) while the 27-downside ranged from -0.21% (BLFS) to -5.67% (FIXX); 

 

Sentiment and a few daily indicators:

A rally of tech, healthcare stocks and better-than-expected manufacturing data as Eli Lilly announcing the start of a P3 trial of LY-CoV555, an experimental coronavirus antibody treatment that may prevent the virus from spreading among U.S. nursing home staffers and residents.

  • Monday 4.66 cases,
  • Friday 4.4 cases,
  • Monday 4.26 million cases

Monday’s death rate totaled 154,860 after Friday’s 152,074 and last Monday’s 147,143 <Johns Hopkins University>

 

Stats:

Upside volume: 

  • Monday: 8 out of the 31-upside had higher than the 3-month average volume;
  • Friday: 5 out of the 7-upside had higher than the 3-month average volume;

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Monday was down -0.18 points or -0.74% at 24.28
  • Friday was down -0.30 points or -1.21% at 24.46

Downside volume:

  • Monday: 1 out of the 1-downside had higher than the 3-month average volume;
  • Friday: 4 out of the 27-downside had higher than the 3-month average volume;

 

August, the second month of Q3 …

Monday (8/3) closed positive with 31 advancers, 1 decline and 3 flats

 

The Bottom line:  Coming off Friday’s close and July’s month end, “Are we stuck in a “hall of mirrors” continuum?”

A “Woodstock” rally in the tech and RegMed/cell and gene therapy stocks as earnings reporting swings up.

The major averages were coming off their fourth (4th) consecutive monthly gain in July, with last months “numbers” inclining as the Dow gained 2.4%, the S&P 500 rising 5.5% and the Nasdaq jumping more than 6%.

After today’s earnings’ report by Aduro Biotech (ADRO), we are headed into the storm of twelve (12) earnings announcements this week … which will open the kimono of LPS (loss-per-share) and visibility of development status and revenue’s expectation versus estimates.

 

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.