December 16, 2016 7:20am
Can result in escalated trading activity and volatility as traders close, roll out or offset their expiring positions.
I answer one question; in which company should investors put, keep and commit their money!
Who is in today’s headlights – six (6) equities, are they a BUY or a SELL – subscribers know!
I write in every line that investors need to avoid risks as if I were the first to be hurt if I am wrong!
The sector is being driven by a missing theme – optimism; until we get some, the path of least resistance is lower.
BUY: XON
Sell: BCLI, BSTG, KITE, SGMO and VCEL
Indexes and ETFs: The IWM (+0.33%), XBI (+1.71%) and the IBB (+0.76%) are UP while the XLV is NOT indicating
Dow futures are UP +0.15% and NASDAQ futures are UP +0.10%
U.S. stock index futures pointed to a flat open on Friday as traders continued to digest the Federal Reserve's decision to raise interest rates.
European shares were mixed in morning trade as investors continued to react to the U.S. Fed's rate hike and digested fresh data from the euro zone.
Asian shares turned positive as currency swings captured attention with the yuan midpoint fixed at its lowest against the dollar since May 2008 and Japan stocks up slightly on recent yen weakness.
Data docket: housing starts and building permits released at 8:30 a.m. ET.
The stem, cell, gene and regenerative therapy (SCG&RT) sector closed POSITIVE on Thursday, NEGATIVE on Wednesday, POSITIVE on Tuesday, NEGATIVE on Monday and POSITIVE last Friday.
The SCG&RT sector’s record after the last 5 days (of 43 covered companies):
· Thursday closed POSITIVE with 19 decliners, 23 advancers and 1 flat;
· Wednesday closed NEGATIVE with 26 decliners, 16 advancers and 1 flat;
· Tuesday closed POSITIVE with 19 decliners, 22 advancers and 2 flats;
· Monday closed NEGATIVE with 27 decliners, 14 advancers and 2 flats;
· Friday closed barely POSITIVE with 19 decliners, 20 advancers and 4 flats;
Remembering last night’s newsletter, “The fear and greed indicator is up. As far as “our” universe is concerned, there's a difference between predicting what could, might or should happen … especially where 2017 is about to knock on the door.”
Friday is triple witching occurs when the contracts for stock index futures; stock index options and stock options expire on the same day.
- Triple witching days happen four times a year on the third Friday of March, June, September and December;
- Triple witching days, particularly the final hour of trading preceding the closing bell, can result in escalated trading activity and volatility as traders close, roll out or offset their expiring positions.
While much of the trading in closing, opening and offsetting futures and options contracts during triple witching days is related to the squaring of positions, the surge of activity can also drive price inefficiencies, which draws short-term arbitrageurs.
These opportunities are often the catalysts for heavy volume going into the close on triple witching days, as traders attempt to profit on small price imbalances with large round-trip trades that may be completed in seconds.
Be ready …
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 +0.94% and is UP +0.76% in Friday’s pre-market;
· The SPDR S&P Biotech ETF (XBI) closed Thursday up +1.71% and is UP +1.71% in Friday’s pre-market;
· The Health Care Select Sector SPDR ETF (XLV) closed up +0.65% Thursday and is NOT indicating in Friday’s pre-market;
· The iShares Russell 2000 (IWM) closed down -1.25% on Thursday and is UP +0.33% in Friday’s pre-market
Companies in my headlights:
Biostage (BSTG) closed UP +$0.12 to $0.97. Historically, any run-up has been taken down by the dependence on day trading investors. The treatment indicator will be regenerating IF and AS the IND is filed in 2017 and clinical trial is successful, a long time away. Hard to say as I like the company and its CEO – SELL;
Brainstorm Cell Therapeutics (BCLI) closed DOWN -$0.14 to $2.48 following Wednesday’s $2.62 (+$0.46). I will make it simple, when has BCLI sustained its share pricing after news – Maintaining SELL;
Intrexon (XON) closed UP +$0.27 to $28.38. Every time XON drops below $30.00, it always seems to jump back-up. Randal Kirk CEO and 10% owner of Intrexon purchased 34,606 shares on 12/13/16. The price per share was $28.90 for a total transaction of $1,000,113 – BUY;
Kite Pharma (KITE) closed UP +$1.64 to $49.27 following Wednesday’s $47.63 ($1.02). The upswing was on a platform realization but, a software deal with NO details. As I had stated, why chase a spurious swing – Maintaining SELL;
Sangamo (SGMO) closed UP +$0.05 to $3.40 following Wednesday’s $3.35 (+$0.10). What’s the reason, hemophilia is in season, what’s the price, it ain’t gonna be nice, when its rich – the chart will pitch” – remember the fear and greed indicator is up -Maintaining SELL;
Vericel (VCEL) closed DOWN -$0.60 to $3.50 following Wednesday’s $4.10 (+$1.50) after Tuesday’s $2.60 (-$0.05) and FDA approving MACI® (autologous cultured chondrocytes on porcine collagen membrane) for the repair of symptomatic single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults. As I had stated on Thursday, after every run-up, many sell; cash on hand has been VCEL’s biggest issue as debt increased, ATM usage doubled – be ready for an offering. And lo and behold, VCEL has proposed an offering with PiperJaffrey as its banker. The after-market indication is another -$0.45 or -12.86% - 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.
Henry’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your advisor about what is best for you.
