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PreMarket Prep Recap: Making Sense Of A Senseless Market, Finding Support In Delta, PG&E Plunge

Joel Elconin

At the top of Thursday's PreMarket Prep show, the hosts analyzed the schizophrenic after-hours and premarket trading in stock index futures

The conclusion: investors are so fixated on the trade war with China that any news, good or bad, true or not, is inducing random and unsustainable price action in both directions.

Co-host Dennis Dick, an extremely active premarket and after-hours trader, was scratching his head over the recent price action intraday and overnight.

Multiple 300-point Dow Jones moves intraday and overnight in both directions with no true fundamental news is surely a sign of a market in need of a true catalyst.

With third-quarter earnings season getting its unofficial start Thursday with Delta Air Lines, Inc. (NYSE: DAL), investors will welcome news to focus on other than President Donald Trump's Twitter feed.

Finding Support In Delta After Mixed Q3, Lower Guidance

A mixed third-quarter report with lower fourth-quarter guidance had Delta Airlines in the red in premarket trading.

Shorting the issue into its decline may have been a case of arriving late to the party.

The PreMarket Prep co-hosts identified support if investors were in the mood for a contrarian call.

From the monthly charts, it was hard to ignore the trio of monthly lows — April, May, June — at the $51.40 area to cover a short or attempt a long in the issue.

If one was able to take some heat, Delta has turned into a profitable trade, The decline off the open took the issue to $51.07 before it rebounded to $52.40.

The stock was trading down 1.45% at $53.14 at the time of publication. 

PG&E: The Definition Of A Sick Stock

What happens when you hold a stock long that holds all the characteristics of a company going bankrupt? You lose money.

PG&E Corporation (NYSE: PCG) has defied gravity and traded as high as $25 in June. Recent news of massive blackouts in California in an attempt to prevent wildfires has longs heading for the exits.

If a major collapse occurs in the issue, the stock has a January low of $5.07 that came in the same month as its bankruptcy filing, but it was not expected to come into play Thursday.

PG&E was trading down 30.54% to $7.64 at the time of publication. 

Changes In The C-Suite Boost Bed, Bath And Beyond

Bed Bath & Beyond Inc. (NASDAQ: BBBY), a perennial dog in the retail sector, traded higher in Thursday's premarket session on news that it hired Mark Tritton, formerly of Target Corporation (NYSE: TGT), as its new CEO.

The rally seemed worth chasing to the co-hosts, and longs were encouraged to monitor price action at the $12.50 area. 

The reason: the issue put in 10 consecutive daily highs (June 6-18) from $12.15-$12.80 and may find sellers in that area once again.

As it turns out, Bed Bath & Beyond reached the upper end of that range before stalling at $12.74 and is now attempting to remain in the $12. The stock was trading at $12.11 at the time of publication, up 21.78%. 

Saluzzi On The Broker Wars

Midway through Thursday's show, Jonathan Corpina of Meridian Equity Partners joined the broadcast to make some sense of the recent price action.

On Friday's show, Joe Saluzzi of Themis Trading will try to identify some of the winners and losers from the recent brokerage armageddon.

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunesGoogle Play, Soundcloud, Stitcher and Tunein.

Related Links: 

PreMarket Prep Recap: Overnight Reversal, Technical Analysis For Dummies

PreMarket Prep Recap: A Buy-The-Dip Opportunity?

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