May 12, 2020 7:54am

One word posed as a question describes the prospects of share pricing in light of efforts to reopen the economy

Pre-open indications:  1 BUY and 4 SELLs

What I provide is an “intelligence daily” to inform the RegMed/cell and gene therapy sector and its investors utilizing indication and warning analysis. Check the BOTTOM LINE <read more>

Dow future are UP +0.41% (+100 points), S&P futures are UP +0.35% (+10 points) and NASDAQ futures are UP +0.41% (+38 points)

 

Stocks futures edged higher on Tuesday as investors evaluated the latest attempts to reopen the economy;

European markets lost steam as reports of a resurgence of new coronavirus cases and reopening efforts as the pan-European Stoxx 600 reversed early losses to climb by +0.3%. Germany has also seen the rate of the virus increase;

Asia Pacific markets in several countries including China and South Korea have experienced an uptick in cases after restrictions were eased. Chinese inflation data for April missed expectations.  The consumer price index for April rose 3.3% year-on-year, versus expectations of a 3.7% increase.

 

Henry’omics:

Is this market confident or about to be confused by troubling and unproven signals?

The Nasdaq rose for a sixth (6th) session while posting its longest winning streak this year. With Monday’s gain, the gauge is firmly in the green on the year, up 2.4% and sitting just 6.5% from its record high reached on Feb. 19.

The Dow fell about 100 points to start the week, while the S&P 500 was little changed yesterday, Monday.

While bouncing swiftly from their March lows, the S&P 500 (-9.3%) and the Dow (-15.1%) are still well into negative territory for the year.

Could it be, the latest rise in the sector’s pricing is in some part related to FOMO (the-fear-of-missing-out) driving unsustainable highs? Another unknown, will resistance be supported during this earning release period? 

 

Monday night’s title: “markets get drained as the sector gains momentum.”

  • The NASDAQ closed UP +71.02 points (+0.78 %);
  • The IBB closed up +4.28% and XBI also closed up +4.77%;
  • The CBOE Volatility Index (VVIX: INDEX) was down -1.47% as 12 out of the 24-upside having higher than the 3-month average volume and remained LOW with 2 out of the 9-downside having higher than the 3-month average volume;
  • Monday closed positive at 24/9 and 2 flats with the 24-upside ranging from +0.33% (SAGE) to +15.14% (ATHX) while the 9-downside ranged from -0.12% (STML) to -4.22% (RENE.L); 

Q2:

  • May registered 2 negative, 5 positive closes
  • April registered 10 negative, 11 positive closes and 1 holiday.

Q1:

  • March registered 11 negative, 10 positive closes and 1 neutral close.
  • February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
  • January registered 9 negative, 10 positive closes and 2 holidays.

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Sell:

  • Fate Therapeutics (FATE) closed up +$1.38 and has a negative -$0.72 or -2.38% aftermarket indication;
  • ReNeuron (RENE.L) closed down -$7.00 after Friday’s +$20.00 after Thursday’s +$25.00 with a negative -$4.00 US pre-indication;
  • Sangamo Therapeutics (SGMO) closed up +$0.36 and has a negative -$0.46 or -5.08% aftermarket indication after reporting a Q1/2020 loss (-60.87%) and missed revenue estimates (-57.78%);

BUY:

  • CRISPR Therapeutics (CRSP) closed up +$7.45 and has a positive +$1.13 or +1.84% aftermarket indication;

Maintaining Sell into Strength:

  • Athersys (ATHX) closed up +$0.43 after Friday’s +$0.21 with a lot of volume to sell into as trials will take time plus a negative as far as taking PPP funds from government will simultaneously raising $57.6 M. ATHX has a positive +$0.07 or +2.14% pre-market indication;

 

The BOTTOM LINE:  It’s all about weighing optimism versus pessimism in its many forms. The IBB was up +10.38% for the past six (6) sessions and the XBI (on which I focus) was up +14.14% as Monday closed up. Last week registered four (4) positive closes and one (1) negative (Thursday) close.

Reiterating, define fear for me; I say maybe NOT today but, can you afford to wait for yet another decline?

  • Would you trust soulless, algorithmic programs ruling electronic trading?

Let’s slowly and partially liquidate the highs, pick some new lows to buy; then sell into the next wave of highs! Covid-19 impact on markets - has it passed or not? Not … a sell-off looms yet again!

 

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.