RegMed Investors’ (RMi) closing bell analysis, sector suffers lethargy – a lack of enthusiasm

October 13, 2016 6:08pm

… Stocks rise, stocks slip, swiftly flow the days …

Pullbacks offer an opportunity to provide fuel to propel the sector to its past pricing and the incremental upside from these ‘dog days” …

… Todays downsized should stimulate tomorrow’s upside

Pre-open indication’s tally:  2 hit (BSTG and MDXG) and 5 miss (AGTC, FATE, KITE, ONVO and XON)

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

Do you care what happened today, you could have known … because it has implications to Friday's sector activity?   Subscribe or lose!

I say what others won't, so you can do what others can't!

There are two things that investors need - interpretation of news and translation of market metrics concerning the stem, cell, gene and regenerative therapy sector to substantiate share pricing.

U.S. stocks fell on Thursday, but closed well off session lows, as investors digested weak data out of China and rising oil prices while assessing the possibility of a Federal Reserve rate hike.

The NASDAQ closed DOWN -25.69 or -0.49% to 5,213.33 and the DOW closed DOWN -45.26 or -0.25% to 18,098.94.

A day in the life of the stem, cell, gene and regenerative therapy (SCGT & RT) sector – the advance/decline line scenario of our 43 covered companies:   

• The open was negative with an A/DL of 5/33 and 5 flats;
• The mid-day stayed negative with an A/DL of 15/25 and 3 flat;
• The closing bell  was negative with A/DL of 9/31 and 3 flats;

Henry’omics:

The stem, cell, gene and regenerative therapy (SCGT&RT) sector opened negative, stayed negative at the mid-day and closed negative.

• As I stated in the pre-open letter, “The indexes and ETFs were sending a warning. Despite the recent weakness, investors continue to pour money into ETFs but, NOT sector stocks!”

Reiterating, “I keep track of closes, indexes, pricing as …news lately lacks any energy and the social media impact of RMi reporting stimulates the reality of “our” universe as well as disrupting element in the trading of sector equities!”

I keep telling investors in the a.m. to check the indexes:  

• The iShares Russell 2000 (IWM) indicated negative pre-open -0.71%, and was DOWN -0.83% at the close while the iShares Nasdaq Biotechnology (IBB) indicated a negative pre-open -0.71% and closed UP +0.36% at the close.

October is a month of heightened volatility, especially in an election year (let alone one with candidates as divisive as the two "headliners" we have to choose from this year), but with these typically "weak" months of the year looking more and more like they're going to end in positive territory, with trading dominating the sector’s movement, buyers have been pushed or stepped aside these past months.

Look close at today and the past days – trading ranges - I see patterns evolving as technicals and fundamentals matter … yet they seem over-ridden as:

The downside trend reflects a pricing trend range of

• Thursday’s decline ranged  from -0.23% to -5.95% in thirty-one (31) equities;
• Wednesday decline ranged -0.73% to -8.89% in thirty-six (36) equities;
• Tuesday’s decline ranged from -0.76%  to -14.95% in thirty-two (32) equities;
• Monday’s decline ranged from -0.00 to -10.45% in ten (10) equities
• Friday’s -0.06% to -14.55% in 28 equities;
• Last Thursday’s -0.11% to -9.48% in 9 equities;

The upside shows a pricing trend range of

• Thursday’s upside ranged  from +0.12% to +3.84% in nine (9) equities;
• Wednesday’s upside ranged +0.44% to +11.68% in six (6) equities;
• Tuesday’s upside ranged from +0.22% to +8.15% in ten (10) equities;
• Monday’s +0.47% to +10.07% in thirty-three (33) equities;
• Friday’s +0.11% to 12.63% in 15 equities;
• Last Thursday’s +0.26% to 7.19% in 32 equities;

Wrap-up: The day’s sector <43 companies> gains were lower and tighter than the previous <Wednesday and week’s sessions> - review the progression>, while the downside trading range were also tighter than the previous sessions … yet the number of downside companies seemed to remain close to constant.

• When trading ranges breaks up or down on volume, which I watch … the message sent speaks to the patterns – eliminating any thought of a crystal ball.

Focus on the pattern analytics!

Todays downsized should stimulate tomorrow’s upside!

Abnormal volume … highs and lows

• Mesoblast (MESO +0.15) 2904 shares traded <3 moth average = 21 K shares>;
• VistaGen (VTGN -0.01) 4265 shares traded <3 month average =45.4 K shares>;
• Histogenics (HSGX -$0.05) 8742 shares traded <3 month average = 53.4 K shares>;
• Capricor (CAPR -$0.07) 10.8 K shares traded <3 moth average = 34K shares>;
• Biostage (BSTG -$0.014) 29 K shares traded <3 month average = 119 K shares>;

Pre-market indication review:  2 hit and 5 miss:

• Applied Genetic Technologies (AGTC) closed DOWN -$0.13 – miss;
• Biostage (BSTG) closed DOWN -$0.004 – hit;
• Intrexon (XON) closed DOWN -$0.27 – miss;
• Fate Therapeutics (FATE) closed DOWN -$0.16 – miss;
• Kite Pharma (KITE) closed DOWN -$0.24 – miss;
• MiMedx (MDXG) closed UP +$0.04 – hit;
• Organovo Holdings (ONVO) closed DOWN -$0.05 – miss;
• Vericel (VCEL) closed DOWN -$0.03 – miss;

Percentage decliners:

• Fate Therapeutics (FATE) -5.95% after Wednesday’s -8.81%;
• Regenxbio (RGNX) 5.53%;
• Cellectis SA (CLLS) -4.83%;
• Verastem (VSTM) -4.03%;
• ImmunoCellular (NYSEMKT: IMUC) -3.72%

Percentage advancers:

• Asterias Biotherapeutics (NYSEMKT: AST) +3.84%;
• Mesoblast (MESO) +3.55%;
• Northwest Bio (NWBO) +3.06% or +$0.013 after Wednesday’s -8.89%;
• Stemline (STML) +2.28%;
• BioTime (NYSEMKT: BTX) +1.69% - as goes AST;

Flat:                                                                                                      

• Athersys (ATHX) at $2.10;
• International Stem cell (ISTO) at $1.80;
• ReNeuron (RENE.L) at $2.50

Review my fear gauge or the CBOE Volatility Index (VIX):

• Thursday traded near 17  - a +7.31% increase;
• Wednesday traded above 15.5;
• Tuesday traded 15.9 – a +18.6% increase;
• Monday traded near 13.4;
• Friday traded near 13.4;
• Last Thursday traded near 12.84;

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.