U.S. Markets open in 7 hrs 27 mins

PreMarket Prep Recap: FedEx Doesn't Deliver, Domino's Sliced After Downgrade

Joel Elconin

A disappointing report from FedEx (NYSE: FDX), follow-up in the price action in Boeing (NYSE: BA) and a rating change in Domino's Pizza (NYSE: DPZ) were a few of the topics discussed on today's PreMarket Prep Show.

More Pain For FedEx Shareholders

After the close on Tuesday, FedEx went three for three the wrong way. The company announced an EPS miss on slightly lower revenues and slashed 2020 guidance. The triple whammy on an already weak stock has the issue deep in the red in today's session.

When being covered on the broadcast, it was sagging at the pre-market low, suggesting there was more work to do on the downside. After a lower open, it had a brief rally to $152.77 and resumed its move lower.

Since the area was entering an area of limited support, investors were cautioned against trying to big a bottom, at least in today's session. A potential target for those shorting the stock or looking to cover a short were alerted to the pair just above and below the $144 area from mid-October. It found intra-day support at $146,29 and is attempting to rebound.

Boeing's Positive Reaction To Negative News

After shedding nearly $15 on Monday off the announcement that Boeing was considering cutting back or halting 737 Max production, Tuesday's decision to halt brought more buyers than sellers into the issue.

On Tuesday's show, the importance of holding its low for move at $319.55, or the entire $320 area was repeatedly emphasized. After a lower open, it continued in that direction until major buyers stepped ahead of that level making the $320.61 and embarked on an impressive rally that took the issue to $330.95 before ending the session at $327.

Co-host Dennis Dick commented that the issue may put a short-term bottom in and was looking for the rebound to continue as long as the $320 held. After a higher open, it retreated but found support ahead of Tuesday's close ($327), only reaching $328.14 and then resumed its move higher. With three hours remaining in the session, it has reached $333.20 and backed off under $333.

Time To Take The Dough And Exit Domino's

Before the open, Longbow downgraded Domino's from Buy to Neutral. Dennis Dick respected the change as the issue has rallied from its September low of $223.40 and was knocking on the door of its all-time high from August at $305.24. The reason being the analyst had been bullish and was suggesting it may be time to take some profits.

The Street ts taking note of the downgrade. After a lower open, it attempted to rally but found sellers ahead of Tuesday's close ($291.75), only reaching $291.04 and is now trading in the mid-$280 handle.

Michelle Schneider Joins The Show

Midway through the show Michelle Schneider, Director of Trading and Research joined the broadcast. She alerted listeners to a possible topping formation in the SPY and other sectors and commodities she is following.

At 8:35 a.m. EST, Ian Winer, who sits on the board of Bellator Asset Management will be our guest to discuss the recent rally and his outlook for 2020.

0

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.