January 3, 2022 7:52am

After a volatile 2021, the market and cell and gene therapy sector will start the year with anxieties, including the surge in the omicron variant and the likelihood of multiple interest-rates hikes expected later this year

Pre-open indications: 3 BUYs and 3 SELLs

What I provide is an intelligence daily. RMi outlines a daily bell weather of “indications” about what you need to know; it’s what could happen or materialize after the opening and what might happen during the session.

Remember that overnight and pre-open actions in futures don't necessarily translate into actual trading in the coming day’s session.


Dow futures are UP +0.9% (+177 points), S&P futures are UP +0.58% (+28 points) and NASDAQ futures are UP +0.68% (+112 points)

 

U.S. stock futures are up in force in premarket trading Monday, the first trading session of 2022,

European stocks are also up with most major regional indexes higher,

Asia Pacific stocks were mixed as markets in Australia, mainland China and Japan were closed on Monday for a holiday.

 

Economic Data Docket: Markit US Manufacturing PMI, December final (57.7 estimated, 57.8 prior); Construction Spending, month over month, November (0.7% estimated, 0.2% prior month)

  • This week is important:  December jobs report (Friday) and minutes from the Federal Open Market Committee’s (FOMC) latest policy-setting meeting on Wednesday.

 

Henry’omics:

The new year starts with continued uncertainty around the Covid-19 pandemic. The rise of the omicron variant helped lead to thousands of flight cancellations during the holiday season and has led some businesses and schools to consider temporary closures. <CNBC>

Looking back on 2021, the sector was split as to monthly positive and negative closes.  However, there was uneven action and sector rotation, narrowing and alternating “name” leadership made it difficult to detect toward any sustainable pricing action.

While many stocks fell Friday on the last trading day of 2021, with the Dow dipping -0.16% or 59.78 points to close at 36,338.30, while the S&P 500 slipped -0.26% or -12.55 points, to finish at 4,766.18, and the Nasdaq dropped 96.59 points, or 0.6% to end at 15,644.97.

For 2021, the S&P 500 soared 26.9%, beating both the Nasdaq’s 21.4% rise and the Dow’s 18.7% climb.

 

If you didn’t remember what happen Friday night and the last session of 2021’s close, you won’t be prepared for today’s session:

  • Friday’s evening’s recap of an advance/decline line of 6/27 and 1 flat and 1 acquired.

 

Q1/2022 begins today, Monday 1/4

2021 sector’s running tab: 6 positive and 6 negative month closes

Q4:

  • December, 9 negative, 1 neutral and 13 positive closes
  • November, 1 holiday 5 positive and 16 negative closes
  • October, 8 positive and 13 negative closes

Q3/21:

  • September, 1 holiday, 10 positive and 9 negative close
  • August - 12 positive and 10 negative close
  • July: 6 positives, 1 holiday and 15 negative closes

Q2/21:

  • June: 15 positive and 8 negative closes
  • May:  8 positive, 12 negative closes and 1 holiday
  • April: 11 negative and 10 positive closes

Q1/21:

  • March: 10 positive, 12 negative and 1 neutral closes
  • February: 9 positive, 10 negative closes and 1 holiday
  • January: 10 positive, 9 negative closes and 1 holiday

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Probabilities versus aftermarket/pre-open share pricing indication moves:

SELL:

Mesoblast (MESO) closed down -$0.01 to $4.08 and has a negative -$0.15 or -3.13% aftermarket indication following its recent meeting with the FDA’s Office of Tissues and Advanced Therapies (OTAT); indicated that Mesoblast’s approach to addressing outstanding CMC items is reasonable and the in vitro immunomodulatory activity of remestemcel-L proposed by MESO as a measure of its potency is a reasonable CQA for the product in the treatment of children with SR-aGVHD.

Biostage (OTCQB: BSTG) closed down -$0.05 with 1,001 shares traded after Thursday’s +$0.05 with 600 shares traded, Wednesday’s -$0.01 with 500 shares traded, Tuesday’s $0.00 with 0 shares traded and Monday’s flat with 2,000 shares traded. Notice how the shares traded with and without the manipulated share pricing by volume stimulation.

Sage Therapeutics (SAGE) closed down -$0.71 to $42.54 with a -$0.54 or -1.27% aftermarket indication

 

BUY:

Editas Medicine (EDIT) closed down -$1.24 to $26.55 with a positive +$0.26 or +0.98% pre-market indication,

Intellia Therapeutics (NTLA) closed down -$3.00 to $118.24 with a positive +$0.76 or +0.64% premarket indication

Fate Therapeutics (FATE) closed down -$1.56 to $58.51 with a positive +2.47 or +4.22% pre-market indication

 

The BOTTOM LINE: Brace for more choppiness heading into the start of the year.

I used to think negativity was a state of mind. Now, having watched for long enough, I have come to realize that negativity can be a character trait

The volatile nature of cell, gene and biotech stocks is a double-edged sword, meaning these stocks can produce gains but, sustainability or lack thereof has been a factor through 2021 and I believe will continue into 2022.

Boom or bust as many miss end-points incurring weighty losses if a drug trial fails to perform or comes to market without any following.

Risks are also due to the possibility that many products under development may never make it to market. Share pricings were NOT maintained in 2021, begetting the dropping of many names as months wore on.

Early January 2022 can deliver some … gains but also generate algorithmic based losses.

I say today what others won't, so you can do what others can't whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors

I still have a hang-up with investment bank rankings, they don’t take the daily monthly or even quarterly share pricing effects. Buy-side analysts work for funds that purchase or actively trade the securities they cover and even they have their lapses.

I have “lived” on both sides and “find’ that “big spikes are common in these markets but, they are usually short in duration.”

The 2021 sector responded only with fluctuating sessions algorithms driven.

So, my bottom of the Bottom Line, Investors should be extremely cautious about adding any new exposure.

The cell and gene therapy sector has a downside bias and is dangerous “spot”; to play in. It's an environment that lures investors in, only to sell off sharply again.

If you want to buy, focus only on stocks showing exceptional fundamental and technical strength.

It's perfectly acceptable to watch from the sidelines and wait for the sector to prove itself amid the recent losses.

RMi’s daily report is a primer that may say little or a lot; yet it serves as insurance that all indications are being examined and evaluated.

WHY do I keep reporting on Biostage (BSTG): When one sees an inextricable wrong and morally repulsive scenario; it takes courage, resolve and patience to stay the course of asking the questions without response!

 

 

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.

Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.