Higher to mixed open expected, propelled by optimism and stabilization

January 28, 2016 6:30am

Some BUY signals should be number# 1 on the portfolio list as sentiment and sector fundamentals regain some sense of normality.

It’s critical to be selective!

Thursday’s seven  (7) indications, will you know who? Let me obsess for you.  Subscribe … http://www.regmedinvestors.com/create-account ...  Can you afford not to?

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors before the sector and markets open.   

DOW futures are UP +0.1% and NASDAQ futures are UP +0.5%

U.S. stock index futures indicated a higher open on Thursday as traders looked to the busiest day of earnings season, with a host of big names set to report.

European equities traded lower in a choppy day of trade following a mixed to negative trend set in Asia and Wall Street as the oil price rebounded.

Asian markets trimmed early losses to trade mixed, despite a last night’s lower finish after the Fed appeared to temper its expectations for U.S. economic growth. Mainland Chinese markets extended their long rout. Hong Kong's Hang Seng index trimmed gains to trade flat. Japan's Nikkei 225 retraced some losses to close down

Data docket: initial claims and durable goods are released at 8:30 a.m. ET, with pending home sales out at 10:00 a.m.

The stem, cell and gene therapy RegMed sector closed NEGATIVE on Wednesday, POSITIVE on Tuesday, NEGATIVE on Monday following POSITIVE closes on Friday and last Thursday.

Past five (5) days:

·         Wednesday closed NEGATIVE with 34 decliners, 7 advancers and 2 flats;

·         Tuesday closed POSITIVE with 18 decliners, 22 advancers and 3 flats;

·         Monday closed NEGATIVE with 26 decliners, 16 advancers and 1 flat;

·         Friday closed POSITIVE with 5 decliners, 38 advancers and 0 flat;

·         Last, Thursday closed POSITIVE with 16 decliners, 25 advancers and 2 flats

Yesterday’s substantial sell-off indicated panic and a thorough lack of confidence and support.

• I'm NOT willing to stomach this latest dose of sector volatility however, I'm confident that “our” universe will start to stabilize.

I believe the stem, cell and gene therapy and RegMed sector will overcome some retests of lows.

• Q4 financial results will confirm weaknesses as well as the winners <i.e. cash position> and the losers <those who are existing on fumes and ATMs without an ability to access to capital markets>.

We crave explanations because they give us an illusion of control or do they?

• Successful investors are effective in the long term because they admit their mistakes. As the world's greatest speculator, George Soros, said, "My system doesn't work by making valid predictions. It works by allowing me to recognize when I am wrong."

Remember, investors’ sentiment is tied to the vagaries of share pricing yet, most CEOs follow the herd rather than create new paradigms ...

You’ve made it to the office, turned on the monitor having just gotten your coffee and it hits you - what are today’s trades?  Thursday’s indications:

• Applied Genetic Technologies (AGTC) closed DOWN -$0.84 to $15.07 after sixteen (16) sessions of intermittent bouts of the “overs” – overbought or oversold.  BUY;

• bluebird bio (BLUE) closed DOWN -$2.71 to $42.53. Blue has been “hammered” too long; the aftermarket indication is an uptick of +$0.27 – BUY;

• Fate Therapeutics (FATE) closed DOWN -$0.29 to $2.19. Fate announced FDA clearance of an IND application for ProTmune for prevention of Acute GvHD and CMV Infection … in a multi-Center, randomized, controlled P1/2 clinical trial in mobilized peripheral blood HCT to be initiated in mid-2016. ProTmune™ is a programmed cellular immunotherapy consisting of donor-sourced mobilized peripheral blood cells which have been functionally modulated using two small molecules.  There are currently no approved therapies for the prevention of GvHD or CMV infection in patients undergoing allogeneic HCT, giving rise to a significant unmet medical need. FATE is one of MY favorites – Maintaining BUY;

• Intrexon (XON) closed UP +$0.42 or $26.37. The aftermarket indication is +$0.13 – Maintaining BUY;

• Kite Pharma (KITE) closed DOWN -$2.86 to $49.49 and is down in the aftermarket -$0.34 – SELL;

• Spark Therapeutics (ONCE) closed DOWN -$3.01 to $27.57. Another bully pulpit statement – oversold. Dating the share pricing at 10/30/15’s $53.90, 11/30/15’s $57.79, 12/31/15’s $45.13 post an offering to begin the year at $41.85 <1/4/16> galvanizes their institutional share pricing history. ONCE expects to be advancing 10 clinical-stage gene therapy programs by 2018, all fully funded with existing financial resources which includes having its first commercial product in the market in 2017 and having two other new gene therapy candidates in late-stage testing by that time.  ONCE is also expected to submit a BLA seeking approval for its lead product, a gene therapy for RPE65-mediated blindness, during the second half of 2016 – Maintaining BUY;

• Verastem (VSTM) closed DOWN -$0.06 to $1.33. Back to my sermon - a trader’s delight with total cash per share of $3.26 <$120.47 M in cash as of 9/30/15> with 36.93 M shares outstanding and 31.39 M share float - BUY;

Opinions expressed are those of the author and are subject to change, and are 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.

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