Indication intelligence, analysis and sector perception

Higher open expected, RegMed’s open - sunshine filters through the trees

February 4, 2016 6:29am

Illuminating the path to the end of a dark tunnel

Why, it’s still about the struggle of being oversold versus overbought – one begets the other!

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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 and NASDAQ futures are UP +0.3%

U.S. stock index futures indicated a higher open on Thursday as traders watched oil and the dollar, which could be key to trading after they sent markets on a wild ride on Wednesday. Falling crude prices and the rising dollar have been poison to the stock market with both sapping corporate profits.

European markets traded higher as the decline in the dollar gave oil prices a boost amid a busy day of earnings. The pan-European STOXX 600 seesawed throughout the morning but was trading around 0.6% higher.

Most Asian markets closed up, following a mostly higher finish on Wall Street overnight amid an oil price surge.

Data docket: initial claims and productivity and costs are due at 8:30 a.m. ET, with factory orders set to come out at 10:00 a.m. ET.

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

Past five (5) days (of 43 covered companies):

· Wednesday closed NEGATIVE with 22 decliners, 20 advancers and 1 flat;

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

· Monday closed POSITIVE with 19 decliners, 23 advancers and 1 flat;

· Friday closed POSITIVE with 8 decliners, 32 advancers and 3 flats

· Last, Thursday closed NEGATIVE with 27 decliners, 14 advancers and 2 flats;

The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector should feel an energy boost as Tuesday’s Advance/Decline Lines (A/DL) of 7/34 increased at Wednesday’s close at 20/22.

Reiterating, false positives <hourly measurements> and volatility have distorted historically reliable indicators like those referenced in end-of-day <EOD> posts.

Still, we are stuck in a quandary of fundamentals, patterns and signals still screaming caution!

Past days <share pricing> “losers” will lead the way as relative performance analysis, also known as relative strength, tells us which stocks will lead in an oversold sector environment.

The most depreciated stocks in “our” universe pulled-back should be among the ones that will lead when the oversold become the overbought!

After all as traders, NOT investors sense a comeback opportunity, they will “play” the “oversold” in times of uncertainty.

Unfortunately, then the stocks that are leading in the sector bounce will be sold on strength and become ripe for seeing again!

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 -$0.38 to $14.36. In line with my belief of the oversold becoming the need to be bought. The cheapest and closest price was on 1/28/16’s $14.56 and 11/9/15 $13.81 – BUY;

Athersys (ATHX) closed UP +$0.03 to $1.27. Haven’t seen that price since 1/11/16 as compared to 1/4/16’s $1.01. A little history reflects 9/24/15’s $1.30, 7/16/15’s $1.23 and 6/25/15’s $1.27. Yet the CEO gets a $110 K bonus after all the failures – so what are we rewarding – many lost battles – SELL;

Bellicum Pharma (BLCM) closed DOWN -$0.83 to $10.16. BLCM started the year at $19.00 and ended 11/30/15 at $23.03 – fits my scenario of the oversold versus the overbought. The after-market indication is +$0.24 – BUY;

Capricor (CAPR) closed DOWN -$0.13 to $2.46. The never ending - “story”, small volume, good ups and just as quick depreciating downs. It will “pop” on days but, over time the real issues surface. After a failed offering, CAPR will be looking for access to the capital raising market – Maintaining SELL;

Fate Therapeutics (FATE) closed DOWN another -$0.30 after Tuesday’s -$0.17 to $1.75. Oversold, having started the year at $3.29 having started December at $4.18 and November at $4.65 – Maintaining BUY;

Intrexon (XON) closed UP +$0.31 following a negative -$0.87 on Tuesday to $31.01. Attention is focused on the Zika virus with no vaccines or treatments for Zika, which has been linked to a surge in babies born with unusually small heads; a scramble is on to find ways to quell the threat. The Zika spotlight is on XON which recently acquired a company with a genetically modified mosquito and has touted it as a tool to combat the virus. The aftermarket indication is +$0.22 – Maintaining BUY;

Juno Therapeutics (JUNO) closed UP +$0.33 to $24.83 after Tuesday’s -$2.73. JUNO is up with an aftermarket indication of +$0.17. Another roll of the dice and an oversold versus the overbought drama – Maintaining BUY;

Kite Pharma (KITE) closed UP +$0.81 to $45.79 after Tuesday’s -$4.13 after Monday’s +$1.62. KITE has been flashing directionless signals having started the month at $61.92 and has been depreciating steadily since the New Year began. The dice are still rolling but, I STILL believe rolling oversold – Maintaining BUY;

Osiris (OSIR) closed DOWN -$0.03 to $6.99 following Tuesday’s $0.27 even after achieving 100% Medicare coverage for Grafix. The newest issue is the CEO has resigned; he had a bad biking accident a while ago and then the accounting stuff. Something tells me, Chairman and co-founder Freidle said it was time to go. Not sure the two “seat holders” taking over are an improvement. The after-market indication is to the downside -$1.09. BUY to SELL;

Verastem (VSTM) closed DOWN -$0.07 to $1.11. 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 – Maintaining 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.

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Editor and Publisher ... Henry McCusker enters his tenth (10th) year at RegMed Investors with past experience in sell-side analysis, buy-side management, corporate management and due diligence.

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