March 23, 2016 6:35am

 

U.S. stocks set to struggle for direction as pre-Easter quiet kicks in.

 

Wednesday’s five (5) pre-open indications – is it time for safety or jeopardy?

 

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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 – it defines the who, when, where, which and what of it …

 

 

Dow futures are DOWN -0.5% and NASDAQ futures are DOWN -0.5%

 

Stock futures point to a flat start on Wednesday with home sales data ahead, but little else to drive sentiment in a holiday shortened week.

European markets traded higher following the terrorist attacks in Belgium claimed to have been carried out by the Islamic State, with major indices shrugging off the attacks.

Asia markets ended mostly lower, but remained relatively resilient after a terrorist attack in Belgium Tuesday.

 

Data docket: Data on new-home sales for February will be released at 10 a.m. ET.

 

 

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

 

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

  • Tuesday closed POSITIVE with 15 decliners, 26 advancers and 2 flats;
  • Monday closed POSITIVE with 10 decliners, 31 advancers and 2 flats;
  • Friday closed POSITIVE with 17 decliners, 22 advancers and 4 flats;
  • Thursday closed POSITIVE with 18 decliners, 21 advancers and 4 flats;
  • Last, Wednesday closed NEGATIVE with 23 decliners, 19 advancers and 1 flat;

 

 

The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector opened up, stayed positive at the mid-day and closed to the upside on Tuesday for the fourth time in a row!

  • Still wearing last night’s hat …”Short-term deterioration is in the wind and ready to blow-down some appreciation! “

One of MY concerns  is … the advance/decline line scenario <above> of our 43 covered companies is declining from yesterday.

  • As emotion overcomes rational judgment, sound investment principles are being replaced by casino-like tendencies.

Very simply;, selling reduces the likelihood of suffering two ultimate consequences – in the first instance, selling helps ensure the preservation of gains and in the second instance,  selling reduces the likelihood of incurring major losses.

 

 

You’ve made it to the office, turned on the monitor having just gotten your coffee and it hits you - what could be Wednesday’s trades?

  • Athersys (ATHX) closed UP +$0.24 to $2.65. The week and month have been good to ATHX having started the month of March at $1.87, February at $1.22 and January at $1.01. Knowing when to sell stocks is tricky, if you can't sell at the appropriate time, the benefits of buying are nil. Capitulating to emotion is the reason why many have trouble selling. This is rooted in an innate human tendency to be greedy – Maintaining SELL;

 

  • Capricor (CAPR) closed UP +$0.20 to $2.95 with 32 k shares traded after Monday’s +$0.15 following Friday’s -$0.09 post Thursday’s +$0.19. The recent registered direct offering adds 1.692 M shares to the float of 7.14 M shares and the outstanding <17.95 M shares>. As CAPR looks to base its future on the next generation of exosomes research, what is their patent position? Based on the past week’s appreciation, traders could be taking advantage of some of the “ups” – Maintaining SELL;

 

  • Osiris (OSIR) closed UP +$0.21 to $5.71. After having more than its share of trouble - accounting and SEC issuesand upheaval begetting  the CEO and CFO to leave. OSIR received a letter from The NASDAQ notifying it is not in compliance because it has not filed its 10K on a timely basis with the SEC which requires it to submit a plan within 60 days to regain compliance with NASDAQ's filing requirements for continued listing. OSIR intends to file its Form 10-K as soon as “practicable”. With  the shares appreciating,  there is recognition of issues that can be resolved.  Starting the year with a price of $10.03 does not compare to 11/2/16’s $18.08 or even 7/1/15’s $19.32.  The lower the share price goes the more it will make OSIR attractive to those contrarians <of which I am one> - SELL to BUY;

 

  • Verastem (VSTM) closed UP +$0.04 to $1.47. VSTM presented  data supporting the initiation of a P1/1b clinical trial of the combination of VS-6063 and avelumabin collaboration with Pfizer (PFE) and Merck KGaA (MKGAY).  VSTM’s results supporting further investigation of directed agents to inhibit these CSC markers to potentially extend survival for patients with ovarian cancer. Another tidbit, Tuesday’s after-market indication is +$0.03 – Maintaining BUY;

 

  • Vericel (VCEL) closed UP +$0.08 to $5.37 after Monday’s+$0.68 following Friday’s +$0.21. Is there a peak after the news and appreciation – an offering? News is great and welcomed but,  I believe that VCEL does not have the ability to fund the ischemic dilated cardiomyopathy program without a partner or another offering which I also believe is desperately needed to fund MACI™.  VCEL shouldn’t depend on a $10 M credit facility and $5 M term loan agreement with Silicon Valley Bank.  Don’t be surprised by an offering appearing in the short-term. Traders’ trade and investors get nervous over strength and rapid run-up which tend to dissipate – maybe not today but, soon – Maintaining SELL;

 

 

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.