October 9, 2017 7:15am
… Short-termism and skepticism
Until positive data with guidance is infused with sustainability, the contagions will linger
Pre-open indications: 7 SELLs
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If you had been right as many times as I have been in these many months of 2017, you would know when to get in or out and even get back in again!
A critical pre-market indication ahead of “our” universe’s open!
Slightly higher open expected
Dow futures are UP +0.17% (39 points) and NASDAQ futures are UP +0.20% (12 points)
U.S. stock index futures pointed to a slightly higher open Monday, as investors turned their attention to political developments both at home and overseas.
European stocks edged higher, with Germany's DAX index hitting a new all-time high on positive data from the euro zone's largest economy.
Most Asia markets closed higher as investors in Asia digested the release of China Caixin services PMI. With Japan, South Korea and Taiwan markets closed for public holidays, investors turned their attention to China as mainland markets resumed trade after the week-long "Golden Week" holiday.
Issues that will affect the trading day: While the U.S. is recognizing the Columbus Day holiday, stock markets will still be open for trade. However, the bond market will remain closed for the day.
Data docket: None
The cell therapy sector closed NEGATIVE on Friday and Thursday, POSITIVE on Wednesday, NEGATIVE on Tuesday and POSITIVE last Monday.
The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):
· Friday closed NEGATIVE with 28 decliners, 12 advancers and 3 flats’
· Thursday closed NEGATIVE with 21 decliners, 20 advancers and 2 flats;
· Wednesday closed POSITIVE with 18 decliners, 19 advancers and 6 flats;
· Tuesday closed NEGATIVE with 23 decliners, 18 advancers and 2 flats;
· Last Monday closed POSITIVE with 14 decliners, 26 advancers and 3 flats;
Henry ’omics:
From Friday night’s closing bell post, “what’s really troubling the sector - Algorithms and ETF exposure are amplifying the downside and smothering sentiment while option expiration and rebalancing are ahead on the 20th.”
- RegMed and cell therapy equities, at least in the short-term, especially pre Q3 results re cash positions and run-ways are likely to grind lower, and investors ought to strap in for the slide!
The pessimism comes as fundaments are skewed while momentum ebbs and flows.
- Those aspects define the short-termism and skepticism as a dynamic, explaining unexpected rises followed by a stampede of traders emptying their positions as algorithms and ETF exposure ensure their divesture.
That said, any recent stock gains will be subject to scrutiny and will be bitten by the snake of timing when investors find fewer reasons to stay long!
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) has a negative -0.07% aftermarket and is NOT indicating in Monday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) has a negative -0.49% aftermarket and is NOT indicating in Monday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) has a positive +0.02 aftermarket and is NOT indicating in Monday’s pre-open;
- The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.11% in Monday’s pre-open
Companies in my headlights:
Athersys (ATHX) closed down -$0.03 to $2.42 with 923.6 K shares traded after Thursday’s +$0.31 or +14.49% to $2.45 with 2.4 M shares traded <3 month average = 1 M shares>. ATHX saw $2.45 on 9/26 and a September high of $2.55 and a low of $1.75 while October began at $2.19. There is a positive aftermarket indication of +$0.08 or 3.74%. Yet, I believe ATHX has a cash problem re spending and NEEDS a financing and there have been rumors of clinical manufacturing batch issues – maybe early, but – Maintaining SELL;
BioLife Solutions (BLFS) closed down -$0.01 to $5.75 with 69.7 K shares traded after Thursday’s +$0.14 or +2.495 to $5.76 with 215.5 K shares traded <3 month average = 180.8 K shares>. Sooner or later, there will be a big break in BLFS’ upside; what is the value of the appreciation – an offering to have cash on the balance sheet to cover the issues other than a failed past collaboration but, a future investment. And as past rumors seep, if they wanted a cash deal to be acquired – cash on the balance sheet would enhance their attractiveness. This is also a big retail play and I NEVER rely on traders to keep an upside “up” - Maintaining SELL;
Cytori Therapeutics (CYTX) closed up +$0.14 to $0.63 with 19.35 M shares traded <3 month average = 1.124 M shares>. For a failed development company to fly is <in my mind> a pure speculation play as the short percentage (%) of the float (33.32M shares) is 6.35%; this management team has never made the right decisions – why now, other than to seek a “strategic” alternative? CYTX is a day trader’s tool. The aftermarket indication is a negative -$0.0148 or -2.33% - Maintaining SELL;
Mesoblast (MESO) closed down -$0.30 to $6.15 after Thursday’s +$0.43 or +7.14% to $6.45 with 49.2 K shares traded <3 month average = 33.7 K shares>. I like the company but it had a target on its back after being up on Wednesday to $6.02, following Tuesday’s $5.77, and last Monday’s $5.80 following the previous Friday’s $5.48 and Thursday’s $5.44. – October stated off at $5.80, September at $6.00, August at $6.96 and July at $8.36 – Maintaining SELL;
Cesca Therapeutics (KOOL) closed up +$0.10 to $4.53 with 119.8 K shares traded after Thursday’s +$0.02 to $4.43 with 159 k shares traded after Wednesday’s -$0.40 or -8.32% to $4.41 with 366.9 K shares traded after Tuesday’s +$1.22 or +33.98% to $4.81 with 3.8 M shares traded <3 month average = 161.6 K shares> after last Monday’s +$0.03 to $3.60 with 2.7 K shares traded. After a USPTO Notice of Allowance regarding a pending patent on Tuesday; the Icarus stock effect went into play. October started at $3.60, September at $3.43 with a low of $3.25 and it began at August at $3.67. The aftermarket indication is a negative -$0.53 or -11.7% – Maintaining SELL;
Sangamo Therapeutics (SGMO) closed down -$0.70 or -4.20% to $15.95 with 1.68 m shares traded <3 month average volume = 1.65M >. October started at $16.20, September at $14.25 and August at $8.45 while July was priced at $8.90. Reflecting on my title, when you’re wobbling on a precipice; it’s time to step back a pace or two. An aftermarket review indicated a negative indication of -$0.15 or -0.94%– SELL;
Vericel (VCEL) closed down -$0.40 to $4.90 with 1.4 M shares traded after Thursday’s -$0.67 or -11.30% to $5.30 with 4.32 M shares traded after being up Wednesday +$0.03 to $5.95 with 597,2 K shares traded following Tuesday’s +$0.10 to $5.95 with 1.26 M shares traded after Monday’s -$0.15 to $5.85 with 219.6 K shares traded following las Friday’s+$0.40 or +7.14% to $6.00 with 2 M shares traded <3 month average = 685.6 K shares> September started at $4.35 with a low of $4.30 having hit $4.85 and $4.95, three (3) times each while August started at $3.13 with a low of $3.00 and a high of $4.30. As Q2 ended, July started at $3.40 with a low of $3.10 and a high of $3.50. The upside was a little too swift and traders will take some profit. VCEL is going to NEED a financing; they only have $14.04 M as of Q2’s end especially with $10.16 M in debt on the books - Maintaining SELL;
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.
