March 18, 2020 5:56pm

Buying opportunities are beginning, adjust portfolios in reaction to share pricing, revenue, runways, operating cash usage specifically G&A and not always management team longevity

Pre-open indications:  7 HITs <ALNY (+$0.74), RENE.L (-$5.50), RARE (-$2.56), BLUE (-$1.58), VSTM (-$0.30), ATHX (-$0.04), NTLA (-$0.47) > and 6 MISS <SAGE (-$0.80), GBT (-$1.05), VCEL (-$2.11), EDIT (+$1.51), FATE (+$0.77), CRSP (+$1.47)>

Welcome to my world of defining the “grey’ in our universe!

The Dow closed DOWN -1338.46 points (-6.3%), the S&P closed DOWN -131.09 points (-5.18%) while the NASDAQ closed DOWN -344.94 points (-4.70%)

 

Henry’omics:

Indexes tumbled on Wednesday triggering yet another trading halt and reaching another coronavirus low as volatility sidelines government response still unfolding.

None of the indexes were safe from the selling wave:

  • Trading was briefly suspended after a “circuit breaker” was tripped up; Wednesday market the fourth time in a week that a circuit breaker was triggered;
  • The Dow dropped marking its first close below 20,000 since February 2017; The Dow was down more than 2,300 points earlier;
  • The Nasdaq slid 4.7%, just a more frequent happening;
  • The S&P 500 was down 5.2% after another “circuit breaker” being tripped just before 1 p.m. ET and closed nearly 30% below a record set last month.

Stocks came off their lows in the final minutes of trading after the Senate obtained the votes to pass a coronavirus relief plan to expand paid leave.

The roller-coaster ride has been traveling up, down, round and round for seven (7) consecutive sessions through Tuesday’s close

Also, the CBOE Volatility Index (VIX) traded up Wednesday up +0.54 or +0.71% after Tuesday’s down -6.78 points or -8.20% at 75.91 following Monday’s highest close at +24.86 or +42.99%.

The number of confirmed U.S. coronavirus cases has jumped to more than 6,400 (from yesterday’s 4,281 cases confirmed) according to data from Johns Hopkins University, while the death count has broken above 100.

 

The unrelenting selling in this market does present a … SLOW …buying opportunity even IF a portfolio has to experience some pain going forward – it won’t be as much as what has already occurred!

The tells:

  • Dramatic decreases from the morning/mid-day to the close of the IBB and XBI ETFs;
  • News that the Senate was about to pass a coronavirus relief bill helped boost the market in the last half hour of trading (already passed by the House, the law provides paid sick leave and expands unemployment benefits for workers impacted by the outbreak);
  • It also provides funding for free coronavirus testing;
  • The slowing change and percentage of the VIX;
  • Wednesday’s close was negative with an A/D line of 10/25, 0 flat of 35 covered;
  • Following Tuesday’s positive close with an A/D line of 26/9, 0 flat of 35 covered;
  • After Monday’s close was negative with an A/D line of 1/34, 0 flat of 35 covered;

I perceive the oversold are about to … slowly initiate an incline, notice I didn’t say “break-out”;

  • Notice most (not all) of today’s upside movers have released earnings;
  • Review some of the comebacks - ALNY (-$6.75 to close +$0.74), FATE (-$1.24 to close +$0.77), CRSP (-$0.84 to close +$1.47), SAGE (-$3.37 to close -$0.80), GBT (-$4.73 to close -$1.05), EDIT (+$0.72 to close +$1.51);
  • 9 out of the 10-upside had higher than the 3-month average volume;

It’s all about a point-of-view – it might appear to be weak however, a finger is in one of the holes in the dike - as my toolbox of direction indications and warning analysis backgrounds has led me to be … early in my forecasts but, pretty much on target!

After all the pain from the last weeks, I am ready to say – SPECULATE – you’ll probably feel pinpricks of short-term pricing but, near-term there is money ($$) to be made!

 

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Wednesday, the IBB closed down -2.93% and XBI also closed down -2.94%
  • Tuesday, the IBB closed up +7.32% and XBI also closed up +3.61%
  • Monday, the IBB closed down -8.96% and XBI also closed down -12.53%
  • Friday, the IBB closed up +6.34% and XBI closed up +6.44%

 

The advance/decline line scenario of 35 covered companies:

  • Wednesday’s close was negative with an A/D line of 10/25, 0 flat of 35 covered;
  • Tuesday’s close was positive with an A/D line of 26/9, 0 flat of 35 covered;
  • Monday, the close was negative with an A/D line of 1/34, 0 flat of 35 covered;
  • Friday, the close was positive with an A/D line of 29/6, 0 flat of 35 covered;

 

Wednesday’s (top 5) incliners:

  • Editas Medicine (EDIT +$1.51);
  • CRISPR Therapeutics (CRSP +$1.47 after Tuesday’s +$3.32);
  • Fate Therapeutics (FATE +$0.77 after Tuesday’s+$4.92);
  • Alnylam Pharmaceuticals (ALNY +$0.74 after Tuesday’s +$4.70);
  • Mesoblast (MESO +$0.38 after Tuesday’s -$0.36);

Wednesday’s (lowest 5) decliners:

  • ReNeuron (RENE.L -$5.50 after Tuesday’s -$7.00 and Monday’s -$7.50);
  • Regenxbio (RGNX -$5.34);
  • Ultragenyx (RARE -$2.56 after Tuesday’s+$3.70 and Monday’s -$9.54);
  • Vericel (VCEL -$2.11 after Tuesday’s -$1.22);
  • bluebird bio (BLUE -$1.58);

 

The percentage (%) indicators:

  • Wednesday’s range of the 10-upside was +0.68% (QURE) to +11.64% (PGEN) the 25-downside ranged from -2.22% (GBT) to -26.64% (ADRO); 
  • Tuesday’s range of the 26-upside was +2.74% (SLDB) to +28.47% (FATE) the 9-downside ranged from -2.23% (ADVM) to -18.03% (BSTG -$0.55); 
  • Monday’s the range of the 1-upside was +0.22% (BSTG) while the 34-downside ranged from -3.22% (ALNY) to -25.93% (BLCM); 
  • Friday’s range of the 29-upside was +0.53% (VYGR) to +29.45% (ADVM) while the 6-downside ranged from -0.95% (AGTC) to -26.25% (BSTG); 

 

Upside volume stats:  to compare

  • Wednesday: 9 out of the 10-upside had higher than the 3-month average volume;
  • Tuesday: 18 out of the 26-upside had higher than the 3-month average volume;
  • Monday: 0 out of the 1-upside had higher than the 3-month average volume;
  • Friday: 24 out of the 29-upside had higher than the 3-month average volume;

Downside volume stats:

  • Wednesday: 15 out of the 25-downside had higher than the 3-month average volume;
  • Tuesday: 7 out of the 9-downside had higher than the 3-month average volume;
  • Monday: 29 out of the 34-downside had higher than the 3-month average volume;
  • Friday: 3 out of the 6-downside had higher than the 3-month average volume;

 

0 flat

 

March

Wednesday closed negative with 25 decliners, 10 advancer and 0 flat

Tuesday closed positive with 9 decliners, 26 advancer and 0 flat

Monday closed negative with 34 decliners, 1 advancer and 0 flat

Friday closed positive with 6 decliners, 29 advancers and 0 flat

Thursday closed negative with 33 decliners, 2 advancers and 0 flat

Wednesday closed negative with 32 decliners, 2 advancers and 1 flat

Tuesday closed positive with 10 decliners, 24 advancers and 1 flat

Monday closed negative with 32 decliners, 3 advancers and 0 flats

Friday closed negative with 29 decliners, 4 advancers and 2 flats

Thursday closed negative with 24 decliners, 11 advancers and 2 flats

Wednesday closed positive with 3 decliners, 30 advancers and 2 flats

Tuesday closed negative with 26 decliners, 7 advancers and 2 flats

Monday closed positive with 11 decliners, 24 advancers and 0 flats

 

 

Opinions expressed are those of the author and are subject to change, and 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.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.