Lower open expected; RegMed Investors’ pre-open, is current pricing sustainable?

September 9, 2016 7:16am

… While the market suffers from bad breadth

Sector reversals are based on pricing profiteering , trading fees and ever revolving  sector sentiment

Indexes and ETFs: The IWM (-0.30%) is DOWN, the  IBB, XBI and XLV are NOT indicating

Companies in my headlights:  AST, BTX, HSGX, MDXG, STML and VTGN

I also answer one question; in which company should investors put, keep and commit their money!

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

How does the old saying go? It's easier to ask for forgiveness than ask for permission? Maybe it's the other way around. Whatever the case, to the extent I need to, I'm NOT going to ask for forgiveness for what I'm about to say – someone NEEDS to speak up and out!

The Dow futures are DOWN -0.28% and NASDAQ futures are DOWN -0.22%

U.S. stock index futures indicated a lower open on Friday morning as traders eyed comments from a series of Fed speakers.

European stocks were lower in morning trade after North Korea claimed its fifth nuclear test and investors continued to digest the European Central Bank's policy decision.

Asian markets ended mostly lower after North Korea claimed its fifth nuclear test and amid disappointment following the European Central Bank's policy decision.

Data docket: All about Federal Reserve speakers, U.S. Fed’s Governor Daniel Tarullo will be on CNBC at 10 a.m. ET. There are also appearances by Boston Fed President Eric Rosengren, at a Chamber of Commerce breakfast in Massachusetts, and Dallas Fed President Rob Kaplan at the Mission Capital conference in Austin. Kaplan also speaks in the evening at the Dallas Security Traders Association convention.

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

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

• Thursday closed POSITIVE with 4 decliners, 35 advancers and 4 flats;
• Wednesday closed POSITIVE with 15 decliners, 27 advancers and 1 flat
• Tuesday closed POSITIVE with 12 decliners, 29 advancers and 2 flats;
• Monday was a holiday;
• Last Friday closed NEUTRAL with 19 decliners, 19 advancers and five flats;

Remembering Thursday’s closing post, “When volume spikes so too does the flight of the arrows to the selling bullseyes! What concerns me is MY early warning sign that signal another bout of volatility … coming sooner than later.”

• As a journalist, ex-analyst and ex-rather different “intelligence” stops in my career, I have always stayed well within myself.

Staying within one’s self means finding contentment where one should never place too much emotion as now in trading situations.

• Thus, the sector signals that an upside is NOT quite going to continue or in the bag; whether it happens on Friday or holds until next week!

Reiterating, it’s too risky to be long at this time especially as Q3 approaches its end, but it’s also too early to go short.

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 Thursday up +0.67% and is NOT indicating
• in Friday’s pre-market;
• The SPDR S&P Biotech ETF (XBI) closed Thursday up +1.40% and is NOT indicating in Friday’s  pre-market;
• The Health Care Select Sector SPDR ETF (XLV) closed up Thursday +0.08% and is NOT indicating in Friday’s pre-market;
• The iShares Russell 2000 (IWM) closed down -0.20% on Thursday and is DOWN -0.30% in Friday’s pre-market.

Companies in my headlights:

Asterias Biotherapeutics (NYSEMKT: AST) closed +UP +$0.38 to $3.50 after Wednesday’s $3.13 (+$0.18). AST  has had a good multiple session run with Tuesday’s $3.13, last Friday’s $2.95, the previous Monday’s $2.96, Tuesday’s $2.82, Wednesday’s $2.79, and the previous Tuesday’s $2.74 as well as the previous Monday’s $2.73. I just don’t like the chart and question resistance and the evidence of support – Maintaining SELL;

BioTime (NYSEMKT: BTX) closed UP +$0.46 to $3.49. I have been touting BTX as oversold yet; I have to say with all the upside, a target is on its share price. Look at the spike in the chart! The past sessions reflect Wednesday’s $3.03 Tuesday’s $2.80 and last Friday’s $2.85. I’d SELL to book profit but, come back at a lower price tag– SELL;

Histogenics (HSGX) closed UP +$0.46 to $4.02. I have been the one who has christened HSGX as the “comeback “ stock consistently however, the chart’s upside spike will be tempting to many holders. Review the past sessions pricing, Wednesday’s $3.56, Tuesday’s $3.02, last Friday’s $3.28 and the previous Thursday’s $3.22 and Wednesday’s <3/31/16>$3.11 and Tuesday’s <3/30/16> $2.97 – Time to reap some profit to buy back in at a lower pricing -SELL;

MiMedx (MDXG) closed UP +$0.44 to $8.41. The chart speaks to the peril of the pricing. The week’s pricing, Wednesday’s $7.97, Tuesday’s $7.66, last Friday’s $7.34 and the previous Monday’s $7.14. Also volume was huge for three days, another indicator to be sold into. I’d be a seller to reap some profit and use it to buy back in – SELL;

Stemline (STML) closed UP +$0.57 to $9.16 - +6.64%. The chart speaks to the hazard of the pricing. The week’s pricing, Wednesday’s $8.59, Tuesday’s $8.43, last Friday’s $8.03 and the previous Monday’s $8.15. I’d be a seller as volume has spiked in moderation but, a basis for speculation to be sold into – SELL;

VistaGen (VTGN) closed UP +$0.22 to $4.17 after Wednesday’s $3.95 (-$0.12) following Tuesday’s $4.07 (+$0.44) after last Friday’s $3.56 (-$0.06) post last Thursday’s $3.62 (+$0.18) followed by the previous Wednesday’s $3.44 (+$0.16), Tuesday’s $3.28 (+$0.31), Monday’s $2.99 and the previous Friday’s $3.07.  VTGN has cash problems, low - $8.5 M and debt of $1.06.8 K, thus a need for an offering. I read the article in “Insider Monkey”, which identified the relevance of their research but, also opined on treatment-resistant depression, or TRD.  The problem with ketamine though is that it’s dangerous, addictive, and prone to abuse. Using ketamine to treat TRD is something akin to using heroin to treat chronic pain. It works, yes, but at a cost. To quote, “here are two companies working on the problem. One is Naurex Inc., which was acquired by Allergan plc (NYSE:AGN) in 2015 for $571 M in cash plus milestone payments. That gives us a good general idea of the capital value of such a drug to pharmaceutical leaders, but unfortunately, the ship has sailed on Naurex in terms of any outsized speculative gains. One may of course buy Allergan (AGN)to capitalize on any success here as a conservative choice, but the more speculative option in terms of high return potential is VistaGen Therapeutics  (VTGN), a small $32 M company that was unable to take advantage of the media generated by the Naurex acquisition last year. It is still a relatively unknown company. Speculation is the BIG word here and will be there versus a well-funded “daddy” such as AGN.  A steep peak stands out on the chart and I never trust being too long– 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.