January 4, 2022 7:51am

Beware the upcoming algorithmic momentum roadblocks

Pre-open indications: 3 BUYs and 5 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 +0.29% (+103 points), S&P futures are UP +0.26% (+12 points) and NASDAQ futures are UP +0.10% (+17 points)

 

U.S. stock futures were higher and slipping in pre-market trading on Tuesday,

European stocks hit a record high as the new year momentum continued in global markets,

Asia-Pacific markets were mixed as data showed accelerating Chinese factory activity growth in December.

 

Economic Data Docket: November’s Job Openings and Labor Turnover Survey will be released at 10:00 a.m. The JOLTS report is closely watched at the Federal Reserve and elsewhere for signs of labor market tightness. December’s ISM manufacturing PMI is also set to release in the morning.

 

Henry’omics:

After the stock market close Monday, Dow futures moved down 0.1% vs. fair value, while S&P 500 futures edged lower. Nasdaq 100 futures inched higher versus fair value. <IBD>

From the title, after another record close, “the “January Effect” seems underway. Wall Street theorizes this perception of a seasonal rise in U.S. equities during the first month of the year is caused by an increase in purchasing following the drop in prices that occurs in December when investors sell positions that have declined in order to take the capital loss in that calendar year's taxes.” <MarketWatch>

"Investors should show prudence going into the new year, but there is reason for optimism. History shows that when the S&P 500 gains 20% or more in a calendar year it averages a gain of 7.7% the next, according to Dow Jones market data. In addition, the median return in the following year is a gain of 10.2%." <IBD>

 

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

Monday’s evening’s recap: “starting 2022 with a flash of confidence. As the oversold revel in and to the upside” … https://www.regmedinvestors.com/articles/12240

 

 

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

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

SELL:

AxoGen (AXGN) closed up +$0.61 or +6.51% to $9.98 with a negative -$0.02 or -0.20% pre-market indication,

CRISPR Therapeutics (CRSP) closed up +$3.46 or +4.57% to $79.24 with a negative -$0.24 or -0.30% pre-market indication,

 

BUY:

Editas Medicine (EDIT) closed up +$1.08 or +4.07% to $27.63 after Friday’s down -$1.24 to $26.55 with a positive +$0.10 or +0.36% pre-market indication,

 

Maintaining SELL:

Mesoblast (MESO) closed up +$0.18 or +3.75% TO $4.98 after Friday’s  -$0.01 to $4.08 and has NO pre-market indication following Monday’s report of 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 flat on Monday with 20 shares traded after Friday’s down -$0.05 with 1,001 shares traded, Thursday’s +$0.05 with 600 shares traded, Wednesday’s -$0.01 with 500 shares traded and last Tuesday’s $0.00 with 0 shares traded. Notice how the shares traded with and without the manipulated share pricing by volume stimulation.

bluebird bio (BLUE) closed up +$0.61 or +6.11% to $10.60 with a negative -$0.08 or -0.75% pre-market indication,

 

Maintaining BUY:

Intellia Therapeutics (NTLA) closed down -$3.00 to $118.24 with a positive +$0.82 or +0.69% premarket indication,

Fate Therapeutics (FATE) closed up +$1.77 or +3.03% to $60.28 after Friday’s down -$1.56 to $58.51 with a positive +0.05 or +0.08% pre-market indication

 

The BOTTOM LINE: I am NOT changing my position, “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 that 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 dropping of many company’s pricings 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 into consideration. 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.”

During 2021, the sector responded only with fluctuating sessions that were driven by algorithms.

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.