November 4, 2015 6:29am

 

“Capacity” in this case, refers to demand, buying power and liquidity.

Henry’s Wednesday’s “7” picks. Subscription required: http://www.regmedinvestors.com/user/register

 

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DOW futures are UP +0.1% and NASDAQ futures are UP +0.2%

 

 

Stock futures point to a slightly higher open on Wednesday, on the heels of gains for Asia and Europe, as investors watch for testimony from FED Chairwoman Yellen and for ADP employment data ahead of the big jobs report.

European markets rallied after European Central Bank President Mario Draghi reiterates the bank is ready to provide more stimulus in December if needed to boost inflation

Asian stocks rose sharply, as a confluence of factors including a stellar market debut from Japan Post's units in Tokyo and positive Chinese data fueled risk appetite in the region.

 

Data docket: Payroll processor ADP is due to report on jobs added in the private sector for October at 8:15 a.m. ET. Trade deficit figures for September are due at 8:30 a.m. ET, followed by the Institute for Supply Management nonmanufacturing survey for October at 10 a.m. ET.  Several Fed officials will speak throughout the day. The key event is testimony by the central bank’s chairwoman Yellen, to the House Financial Services panel on bank regulation at 10 a.m. ET. Fed Governor Lael Brainard is giving a speech on financial stability in Frankfurt 5:30 a.m. Eastern. Among the other highlights, New York Fed President William Dudley will give a press briefing on research on income inequality at 2:30 p.m. ET, and Fed Vice Chairman Stanley Fischer will speak to the National Economists Club at 6 p.m. ET.

 

 

The RegMed sector closed POSITIVE on Tuesday and Monday following NEGATIVE closes on Friday and Thursday and a POSITIVE close on last Wednesday.

Tuesday closed POSITIVE with 15 decliners, 26 advancers and 4 flats following Monday’s POSITIVE close with 1 decliner, 39 advancers and 3 flats of my 43 covered companies.

 

 

Yesterday's new impacting today's movement:

The stem, cell and gene therapy RegMed (SCGT&RM) sector stocks finished higher Tuesday, shrugging off a couple of lackluster results to extend gains for a second session in a row, as biotech  helped prop up the main indexes.

  • According to my contrarian analysis, a truly significant market top or bottom won’t be established until the traders and speculators aided by algorithmic programs stop behaving like every uptick means that happy days are here again – it just doesn’t work that way!
  • As a purported conspiracy theorist, I believe the stem, cell and gene therapy RegMed (SCGT&RM) sector will “peter out” now that it is back within shouting distance of monthly highs.

Is resistance entering the indexes as the iShares Biotechnology Stocks ETF (IBB) closed UP +1.02 or +0.30% on Tuesday following Monday’s advance of +12.60 or +3.87%.

  • Reiterating, we have entered the quarterly sweepstake season. The closer we get to financial results, the larger the loss, the leaner the gains are going to be!

Having climbed the “wall of worry”, we are now ready to descend the “slope of hope”.

  • Be ready for a pricing purge.

 

 

Wednesday’s trading indications, stocks to watch -:

  • Bluebird bio (BLUE) closed UP +$9.26 to $93.64 after Monday’s +$7.25. It appears investors are buying up shares of BLUE ahead of the American Society of Hematology (ASH) meeting. The actual meeting doesn't start until next month, but abstracts are set to be released on Thursday at 9:00 a.m. ET.  BLUE has three ongoing clinical trials that management has said will have data released this year. ASH would obviously be the perfect opportunity, but we won't know until abstracts are published. But in bluebird bio's case, shares are so far off the high after the last data release at the Annual Congress of the European Hematology Association in June that we could still see a nice run if the ASH data is positive.  Maintaining BUY;
  • Intrexon (XON) closed UP +$3.90 to $39.42 after Monday’s +$1.92. Speculators will be “nibbling” the edges of appreciation. The analysts at Wunderlich have a ‘Buy’ rating with a $50 price target, while the analysts at Bank of America have a ‘Neutral’ rating and a $35 price target. Overall, analysts have a consensus price target of $57.71 per share, representing upside of 62.48%. 21 elite funds reported stakes worth $387.43 million in Intrexon Corp (NYSE:XON) as of the end of June, with Dan Loeb‘s Third Point among them, with a holding of 2.7 million shares. XON has done well, with the stock up by 41% year-to-date, soundly beating the S&P 500’s 2.67% return and the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB)’s 11.88% return. The after-hours indication has it UP +$0.13 – BUY;
  • Capricor (CAPR) closed FLAT at $4.07 with NO shares traded- lack of interest?  I have been negative since March and more than often correct about the inflation and deflation of the share pricing - time after time after time.  Be ready for a pending offering - Maintaining SELL;
  • Cellectis S.A. ADR (CLLS) closed UP +$7.24 to $38.58 with 1.271 M shares traded <3 month average = 127.1 K shares> after five (5) days of “ups” and increasing volume. CLLS also rose over 19% on Monday. The move came again on solid volume too with far more shares changing hands than in a normal session. Yesterday’s rally breaks the recent trend for the company, as the stock is now trading above the volatile price range of $27.11 to $31.34 in the past one-month time frame. Speculators will be “nibbling” the edges of appreciation – SELL;
  • MiMedx (MDXG) closed DOWN -$0.42 to $7.39. MDXG has responded to proposed Draft Guidance on Homologous Use of Human Cells, Tissues, and Cellular and Tissue-Based Products ("HCT/Ps") that the FDA published for comment on 10/28/15. Management's opinion has been in compliance with the homologous use requirements.  MDXG states it … “has always marketed our products with general intended uses that have been documented by the FDA as being homologous use for amniotic tissue.   Our marketing does not reflect statements about our membranes being intended for use for specific indications such as dermal ulcers.  Our materials are much more general, and reflect uses that the FDA has already declared as homologous use for amniotic tissue”. Oversold – Maintaining BUY;
  • Osiris (OSIR) closed DOWN -$0.30 to $17.78 after Monday’s advance of $1.05 following Friday’s +$0.60 to $17.03 after being down Thursday -$1.86 to $16.43. Pre-earnings release “jitters” could cause some share pricing “insecurity”, undervalued – On any dip, BUY;
  • VistaGen (OTCQB: VSTA) closed DOWN -$0.49 to $7.00 on 345 share volume. VSTA’s first patient was dosed in a P2A study of its orally available AV-101 in adult patients with treatment-resistant Major Depressive Disorder (MDD). The study is being fully funded by the U.S. NIH, and conducted at the U.S. National Institutes of Mental Health (NIMH - an important factor with a milestone in advancing AV-101 clinical development program.  AV-101’s has a differentiated mechanism of action, oral availability, strong pre-clinical efficacy and excellent clinical safety.  BUY

 

 

The information included above as well as individual companies and/or securities mentioned should be construed as guidance in RMi reviews.

The facts stated and the opinions given in this publication are based on data and information considered to be reliable and have been carefully worked into my qualitative analyses and prognoses. However, no guarantee can be given as to their fairness, accuracy or completeness.

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