Higher open expected; RegMed investors’ pre-open, the sector is suffering from trading polarization

July 11, 2016 6:27am

After JUNO’s trial halt, it wasn’t as bad as it started

… However, what will it mean to the metrics – ETFs and indexes and stock pricing for the week?

This “incident” displays the need for identifying the diversity of risks

I offer a tool set of pertinent facts and targeted analysis defining the who, when, where, which and what of it!

Where is today’s market going – subscribe and find out! 

Where do investors turn for insight and perspective - I say intelligently what others won't, so you can do what others can't!

Companies in the headlights: AGTC, BLUE, CLLS, JUNO and KITE

Indexes and ETFs: The IBB, XBI and XLV are NOT indicating and the IWM (+0.044) is UP

Dow futures are UP +0.41 % and NASDAQ futures +0.51 %

U.S. stock index futures gained on Monday, as global equity markets cheered hopes of more monetary stimulus in Japan and strong jobs data from the U.S.

European stocks were higher in morning trade as investors contemplated more monetary stimulus from Japan.

Asia markets closed higher, bolstered by election results in Japan.

• On Sunday, Japan's ruling coalition won a landslide victory in upper house elections. This makes it likelier Prime Minister Shinzo Abe will be able to push through further monetary easing measures. A stimulus package of at least 10 trillion yen ($97.9 billion) is expected.

The stem, cell and gene and regenerative therapy (SCG&RT) sector closed POSITIVE on Friday, Thursday and Wednesday, NEGATIVE on Tuesday and last Monday was a HOLIDAY.

The SCG&RT sector’s record after the last 5 days (of 43 covered companies):

• Friday closed POSITIVE with 13 decliners, 29 advancers and 1 flat;
• Thursday closed POSITIVE with 15 decliners, 24 advancers and 4 flats;
• Wednesday closed POSITIVE with 19 decliners, 22 advancers and 2 flats;
• Tuesday closed NEGATIVE with 29 decliners, 13 advancers and 1 flat;
• Last, Monday was the 4^th of July holiday;

Remembering Friday’s post, “: The collateral damage was not bad as the sector shook off JUNO’s news.” Downside victims:  BioLife Solutions (BLFS), bluebird bio (BLUE), Capricor (CAPR), Juno (JUNO), Kite Pharma (KITE), and Cellectis SA (CLLS) While Bellicum (BLCM), Intrexon (XON), and Mesoblast (MESO) bounce back as the iShares Nasdaq Biotechnology ETF (IBB) trended up +1.23%

… Investors should be breathing a sigh of relief!

The issue for the week will be how many of the recent upside sector stock prices will start to look risky?

• Traders are always catching the share pricing “drift” if not causing it but, investors should start feeling the contagion – I’d be watching cash positions.

Short-term trends are such that investors might participate in highs mostly but are mostly feeling the lows.  

• Traders are still going to want to sell if the sector drops again – as it usually does; not because you'll be "hoping" there isn’t another downdraft that may or may not occur. What are the odds?

So are you going to pass on selling the upsides, hoping for something better tomorrow?

There is one simple answer – who is desperate to “jump” through the capital access window by year’s end – those are the ones to AVOID.

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? 

Watch list:

• The iShares Nasdaq Biotechnology (IBB) closed Friday up +3.29% and is NOT indicating  in Monday’s pre-market;
• The SPDR S&P Biotech ETF (XBI) closed Friday up +0.91% and is NOT indicating in Monday’s  pre-market;
• The Health Care Select Sector SPDR ETF (XLV) closed up Friday +1.24% and is NOT indicating in Monday’s pre-market;
• The iShares Russell 2000 (IWM) closed Friday up +2.33% and is UP +0.44% in Monday’s pre-market.

Companies in my spotlight:

Applied Genetic Technologies (AGTC) closed UP +$0.24 to $15.81 after being UP on Thursday to $15.57 (+$0.16) after Wednesday’s close of $15.41 (+$0.69). Tuesday had closed at $14.72 following last Monday’s holiday. AGTC is a very polarized equity; many love it to ultimately trade it – Maintaining SELL;

bluebird bio (BLUE) closed DOWN -$0.08 to $48.75 after being UP on Thursday to $48.83 (+0.96) following Wednesday’s $47.87 (+$3.34) after Tuesday’s close of $44.53. Maintaining SELL;

Cellectis SA (CLLS) closed DOWN -$1.57 to $25.15. The aftermarket indication is -$0.73 or -2.92% to $24.42. CLLS is suffering the “halt” –SELL;

Juno Therapeutics (JUNO) closed DOWN -$13.01 to $27.81 after being UP on Thursday +$0.88 and is DOWN in the aftermarket -$0.16 or -0.58% to $27.65 after its leukemia trial had been put on clinical hold after patients died.  Ahead of Friday’s move, JUNO had underperformed the broad markets, with the stock down about 7% year to date. Over the past 52 weeks, the stock is down 17% – Maintaining SELL;

Kite Pharma (KITE) closed DOWN -$3.57 to $48.53. KITE is also feeling the pain of JUNO’s trial’s halt – Maintaining SELL;

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.