Stem Cell Company Stocks 3/3/09

Geron Corp (GERN), the flagship stock of the stem cell sector had an exceptional day today (8% move up) after a series of down days to numerous to count. Also, there have been a couple of nice press releases so far this week from Aastrom Biosciences (ASTM) and Pluristem Therapeutics (PSTI), which caused 30% to 40% increases in their stock prices. ASTM had the FDA remove a clinical hold on a heart study involving the use of a mixed-cell product. PSTI announced FDA clearance for the first-in-human placenta-derived stem cell study. However, despite these events, the sector overall has basically been a mixed bag.

More Chartology
As I've stated in previous blogs, the fate of Stem Cells stocks appears to lie with the general market. It looks like the psychological barrier of DOW 7000 proved not to be the mark which leads to the market's technical bounce. Many thought this might be the number because it represented approximately a 50% retracement of the its high. So, if DOW 7000 isn't the number, what is?

First, let me state why I think these technical points are important. With practically all stocks sliding, there has to come a point where the selling stops. Trading has become more and more electronic and now many hedge funds and investment brokerages use computer base quantitative models to initiate buying and selling. As a result, everyone is waiting for that key number in the traditional indexes to hit. Once it does hit, the flood gates will open. Let's look at the chart below of the S&P500:





According to the chart, the next level of support is around 650 from back in 1996. Currently, we sit at 696 so the 650's represents about a 7% decline from where we are now. Because of the stem cell stocks fundamentals, they should rebound strongly with the market. Unfortunately, if this doesn't hold, the next support area is 450. There's an awful lot of pain ahead of us if we reach those levels.
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2 comments:

  1. UnknownMarch 4, 2009 at 8:19 AM

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  2. UnknownMarch 6, 2009 at 5:18 PM

    Obama to reverse restrictions on stem cell work
    President to announce move on Monday at White House
    The Associated Press
    updated 3:20 p.m. CT, Fri., March. 6, 2009
    WASHINGTON - President Barack Obama on Monday is expected to sign an
    executive order reversing restrictions on U.S. government funding of
    embryonic stem cell research.

    Hard to say what the effect on stocks will be. Anticipated lifting of
    ban built into prices?
    Or, anticipated flow of funds, broader research, expatriate researchers lured back from overseas and a general euphoria that we're about to be a world player in this sphere boosts all SC related stocks? Chime in with your predictions. I say 'general
    euphoria" predominates and 'lifts'!

    Geron surges after US stem-cell research news.

    After Hours: 5.06 +1.19 (30.75%) -

    DH

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