Stem Cell Company Stocks - Updated 2/25/09

It's been an interesting week thus far with the stem cells stocks. After 3 days it's still not clear if these stocks are continuing to decline, leveling out, or reversing back upward. After witnessing Tuesday's action led by GERN and STEM where many of the larger cap stem cell stocks rose, today's action was fairly predictable. Since, these stocks have been on investors' radar, the large caps have led and the small caps have followed. The same occurred today. Many of the stocks that didn't participate in Tuesday's run, made up for it today. For example, after declines 8 of the last 9 days, CBAI.OB spike for 38% gain. Meanwhile, the large caps pulled back again.

First, I think Thursday's action is especially critical for the large caps. If it looks like names like GERN and STEM are getting hammered again, I would recommend you strongly consider exiting your position and then think about retooling if we reach that 6800 - 7000 level in the DOW. If the Stem cell action appears positive, it signals the next leg up.

As far as the small caps, be very careful. Recently, the stock movements of this group have been very "pennylike" (and I mean that in a bad way). CBAI.OB in particular should be watched very closely. Because it finished the end of the day Wednesday 2/25/09 so strongly, I'd expect a gap up Thursday morning. The buyers will probably pour in the first 5 minutes or so of trading based the stock's history the last few months. Shortly thereafter, someone will place a fairly large sell order to take profits and one of the MM's (probably NITE) will sharply drop the price. At this point, the stock could completely turn south giving up all of its gains as stops are taken out and others panic sell. On the other side of the coin, there could be so many buyers that the dip is temporary and the stock steadies into a nice intra-day incline. Overall though, the fate of the small caps lie with large caps. If the large caps respond positively, the small caps should follow.

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Wow! The week of 2/16/09 - 2/20/09 was a crushing one for stem cell stocks. Aside from one sparkling day thanks to CNBC's pump of the Stem Cell Summit, this was a week to forget. Thankfully, there were only 4 trading days. After rummaging through the carnage, it appears at first glance that there may be no survivors and that the stem cell stocks are done. The stock market as a whole is in free fall and the strength of its downward slide is carrying almost every sector down with it (the exception being Gold and Silver). Dow 7000 is right in our mist and to be quite honest, I don't see a market bounce until we hit the 6900 -7000 range. Right now, that appears to be the psychological barrier that everyone seems to be waiting for. Until we get there, I see everything going lower. Fundamentally, I think stem cell stocks are still a good play, but in today's blog, I wanted to focus on where they are technically.

After analyzing the charts of several stem cell stocks, it is still anybody's guess what will happen to them next. First, let me make a clarification. I do not consider myself to be a true stock technician. I'm not someone who looks at bollinger bands, moving averages, and candles. In my opinion, looking at basic linear trends is a much simpler approach and is just as effective. Let first look at Geron Corp (GERN)



This chart of GERN is indicative of many of the relatively larger cap stem cell stocks. Notice the steady 2 month rise beginning around the end of November. Then, all of a sudden there was an explosion on 1/23/09 with Geron's well publicized announcement. The quick rise was unsustainable and a precipitous drop happened shortly thereafter. Presently, the stock appears to be at a crossroads. The arrows show the two possible directions in which this stock can go. It could continue on it's downward path, in which case you cut your losses and wait for a new entry point. However, the spike and drop the last month could just be "noise" or "gap filling" as GERN continues its slow ascent. If we dip to that key level in the DOW of 7000 quickly, a reversal could occur and the positive chart trend remains intact. If it takes 2 to 3 weeks for us to drop another 350 to 400 points, it may be too much to overcome for a bounce back.
Let's look at MCET:



MCET's chart is indicative of many of the smaller cap stem cell stocks. The picture this chart paints is a little more negative and more defined than GERN's. This chart is setting up like a classic penny stock chart. A textbook penny stock consists of building a long term base and then a quick spike. The quick spike is usually followed by a return to the previous or new base building area. MCET seems to be back in a base building mode. However, the bright side is that the base building area appears to be at a higher level than the previous one and if things continue, it's a waiting game until the next super spike happens. Just be sure to sell at the top when it happens.

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Stem Cell Stocks 2/16/09 - 2/20/09 the Week That Was
A new stock was added to the list of stocks followed on http://tradingstemcells2009.blogspot.com/ . The stock is Cytori Therapeutics (CYTX). It should have been on the list to begin with. Purely an oversight on my part.

Top Stem Cell Stock Performer(s) of the Week:
- Celgene Corp(CELG) = Up 3% ; It appears the only safe haven is in this diversified large cap. You won't get big gains, but you won't get huge losses either

Worst Stem Cell Stock Performer(s) of the Week:
- Ariad Pharmaceuticals (ARIA) = Down -42%; Had an explosive run up into earnings; Looks like profit takers and shorters are viciously taking this one down
- Athersys, Inc. (ATHX) = Down -31%; Another stem cell high flyer finally taking its lumps

Stem Cell Stocks Performance Since 1/23/09:

Market Cap Over 50 Million

Ariad Pharmaceuticals (ARIA) = Current Price: $1.48; Up 3%
Aastrom Biosciences (ASTM) = Current Price: $0.45; Down -13%
BioTime, Inc. (BTIM) = Current Price: $1.64; Down -22%
Celgene Corp (CELG) = Current Price: $53.99; Up 10%
Cytori Therapeutics (CYTX) = Current Price: $3.33; Up 4%
Geron Corp (GERN) = Current Price: $5.33; Up 2%
ThermoGenesis (KOOL) = Current Price: $0.55; Unchanged
Osiris Therapeutics (OSIR) = Current Price: $19.04; Up 1%
StemCell Inc. (STEM) = Current Price: $1.96; Down -10%

Market Cap Under 50 Million

Advanced Cell Technology (ACTC.PK) = Current Price: $0.155; Up 29%
Athersys Inc. (ATHX) = Current Price: $0.67; Down -1%
Brainstorm Cell Therapeutics (BCLI.OB) = Current Price: $0.09; Down -13%
Bioheart Inc. (BHRT) = Current Price: Current Price: $1.03; Up 30%
Cord Blood America Inc. (CBAI.OB) = Current Price: $0.0102; Up 168%
Cyro-Cell Intl (CCEL.OB) = Current Price: $0.59; Up 28%
Neuralstem (CUR) = Current Price: $1.15; Down -20%
International Stem Cell (ISCO.OB) = CurrentPrice: $0.45; Up 55%
LifeStem International (LSTM.OB) = Current Price: $0.0150; Up 285%
MultiCell Technologies (MCET.OB) = Current Price: $0.0160; Up 272%
Therapeutics (PSTI) = Current Price: $1.06; Up 67%
Stem Cell Therapy Intl (SCII.OB) = Current Price: $0.07; Up 40%
Stem Cell Innovations (SCLL.PK) = Current Price: $0.0095; Up 73%

Possible Catalyst for the Week:
- Again there is the potential for President Obama to give an executive order to allow funding for stem cell research; Bashers will say sell the news, but after last week's sell off, it wouldn't make a lot of sense. I'd expect at least a 2-day run if it happens.
- If it happens quickly, the DOW hitting 7000 pts could cause a huge upward move. There always seems to be a bear market rally once the market hits some technical or psychological points of support. With every sector basically at the mercy of the general market, I think they'll be a major opportunity to make money online with the huge bounce.



4 comments:

  1. Card,

    CBAI up 38% today, 02/25. Any insight you have and can share on the reason(s) for the spike?

    Thanks,

    Dale

    ReplyDelete
  2. Dhippe, your comment inspired today's blog. We'll find out how correct I am. Thanks!

    ReplyDelete
  3. I would recommend you strongly consider exiting your position and then think about retooling if we reach that 6800 - 7000 level in the DOW. If the Stem cell action appears positive, it signals the next leg up.

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    ReplyDelete