Higher open expected; RMi’s analysis, be ready …

May 25, 2016 6:33am

“Our” universe has too many unknowns to contend with; the mist and the fog of sentiment counsels knowing when an exit is timely

Indexes and ETFs: the IBB, XBI and IWM are UP and the XLV is down

Investing actions: JUNO, HSGX, OPXA, ONCE and XON

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 …

Where are today’s markets going? 

Dow futures are UP +0.35% and NASDAQ futures are UP +0.46%

U.S. stock index futures indicated a slightly higher open Wednesday, continuing a "risk-on" rally in global indexes after positive economic data, rising oil prices, and a new debt deal for Greece.

European stocks extended gains, boosted by a new debt deal for Greece and rising oil prices.

Asia markets mostly closed higher, with Hong Kong leading gains and several major indexes advancing more than 1 percent each, tracking Wall Street's rise on solid housing data.

Data docket: international trade at 8:30 a.m. ET and the Federal Housing Finance Agency's house price index at 9 a.m. ET. Also on Wednesday, the U.S. Energy Information Administration oil and fuel releases inventory data at 10:30 a.m. EDT.

The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector closed POSITIVE on Tuesday, Monday and Friday, NEGATIVE on Thursday and POSITIVE on last Wednesday.

The stem, cell and gene therapy regenerative medicine sector’s record after the last 5 days (of 43 covered companies):

• Tuesday closed POSITIVE with 10 decliners, 29 advancers and 4 flats;
• Monday closed POSITIVE with 12 decliners, 26 advancers and 5 flats;
• Friday closed POSITIVE with 10 decliners, 31 advancers and 2 flats;
• Thursday closed NEGATIVE with 35 decliners, 5 advancers and 3 flats;
• Last, Wednesday closed POSITIVE with 15 decliners, 25 advancers and 3 flats;

Remembering Tuesday’s post, “In a liquid market, the trade-off is mild: selling quickly will not reduce the price much. In a relatively illiquid market, selling  quickly will require cutting  prices by some amount.”

• Reiterating, staying cautious is wise for short-term investors.

The jitters are real as the sector indexes are up but, perhaps getting ahead of themselves - thus a time of and for investor anxiety!

• This is certainly a reasonable reaction, what with confusing patterns of positive versus negative closes.

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

• As a sector “watcher”, the recent swings in the SCGT&RM sector are a reflection of anxiety as speculators seem to churn  any strength;

• Tuesday was the third POSITIVE day in a row on the heels of a NEGATIVE close which followed a POSITIVE  close after the previous  Tuesday’s NEGATIVE close and Monday POSITIVE close;

• Positive closes over the past four and a half months have been erased by the number of negative closes – the path of least resistance is to trend lower!

Connecting the dots of last night’s stand-outs – look for reverses of share pricing:

•   Biostage (BSTG) -4.46%;

•   Brainstorm (BCLI) -3.11%;

•   BioLife Solutions (BLFS) -2.60%;

•   Fibrocell (FCSC) -2.36%;

•   Regenxbio (RGNX) -2.35%

Versus …

•   Opexa (OPXA) +20%;

•   Cesca Therapeutics (KOOL) +14.19%;

•   Verastem (VSTM) +9.79%;

•   ReNeuron (RENE.L) +7.69%;

•   Histogenics (HSGX) +5.38%

Watch list:

• The iShares Nasdaq Biotechnology (IBB) closed Tuesday up +2.26% and is UP +0.35% in Wednesday’s pre-market;

• The SPDR S&P Biotech ETF (XBI) closed Tuesday up +1.95%  and is UP +0.21% in Wednesday’s  pre-market;

• NASDAQ Biotechnology (NBI) closed up Tuesday +2.28%;

• The Health Care Select Sector SPDR ETF (XLV) closed up Tuesday +1.44% and is FLAT in Wednesday’s pre-market;

• The iShares Russell 2000 (IWM) closed Tuesday up +2.06% and is UP +0.50% in Wednesday’s pre-market.

U.S. stocks posted their best day since March on Tuesday with gains of more than 1%, following encouraging reports on the housing market. But the positive news continued overnight with euro zone finance ministers agreeing with Greece and the International Monetary Fund (IMF) on what they called a "breakthrough" deal that will address Athens' requests for debt relief.

Companies in the spotlight;

• Juno Therapeutics (JUNO) closed UP +$0.19 to $40.38. UP, down, round and round share pricing fluctuates. Technical indicators are mixed, JUNO‘s change in share price of -11.16% for the last 12 months is better than its peer median. However, the 30-day trend in its share price performance of -4.90% is now around the peer median suggesting that JUNO’s recent performance has faded relative to peers. The after-market indication is -$0.18 – SELL;

• Histogenics (HSGX) closed UP +$0.13 to $1.99 after Monday’s +$0.05 following Friday’s -$0.03 after Thursday’s -$0.13. HSGX is trading for less than its cash position of $2.34. Oversold – Maintaining BUY;

• Intrexon (XON) closed UP +$1.54 to $29.59 after Friday’s +1.52. The Zika virus scare continues. Shares of XON popped in Tuesday’s trading after reports suggesting that its Oxitec subsidiary’s method of mosquito elimination will be supported at a congressional hearing regarding the Zika virus on Wednesday.  The after-market indication was +$0.13 – Maintaining BUY;

• Opexa (OPXA) closed UP +$0.43 to $2.58. Watch for the “skim” of the upside as 5/19’s <Thursday> pricing was $2.09. Strength in micro-caps is to be sold into - SELL;

• Spark Therapeutics (ONCE) closed DOWN -$1.15 to $53.26. Pfizer (PFE) and ONCE announced encouraging new data from initial patients dosed in the P1/2 study on SPK-9001, which is being evaluated for the treatment of hemophilia B. ONCE’s shares had jumped gained 23.3% on the news. But, profiteers are locking in the “ups”.  The after-market indication was -$0.06 – 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.