On Wednesday's PreMarket Prep show, earnings reports and ratings changes took a backseat to the negative news for cloud stocks and the positive news for opioid-associated drug distributors.
Stormy Outlook For Cloud Stocks
During Tuesday's after-hours session, Workday Inc (NASDAQ: WDAY) shares began to tumble when the company's financial analyst day was not so upbeat.
The company revealed that its long-term focus on R&D and innovation could pressure margins in the short-term.
With the issue being in the precarious state of beginning a recovery from a long time, the PreMarket Prep co-hosts were cautious on the issue and reluctant to pick a bottom.
Investors were alerted to sympathy moves in other cloud stocks. If they followed the leader, they were in for a rough day. Those sympathy stocks included Salesforce.com, Inc. (NYSE: CRM), Adobe Inc (NASDAQ: ADBE) and Splunk Inc (NASDAQ: SPLK).
Co-host Dennis Dick was able to short shares of Twilo Inc (NYSE: TWLO) in after-hours trading and was looking to cover during the regular session.
Talks Ongoing To Settle Opioid Litigation
Before the open, it was announced that McKesson Corporation (NYSE: MKC), AmerisourceBergen Corp. (NYSE: ABC), Cardinal Health Inc (NYSE: CAH) and possibly Johnson & Johnson (NYSE: JNJ) were engaged in talks to settle opioid litigation.
At the time it was being discussed, investors were cautioned that the highs from the premarket session may not be revisited.
No "sell" or "short" recommendation was made, but investors were encouraged to chase the issues on the long side.
Dick was contemplating parting with his long-term buy in Cardinal Health, as it has done nothing over the past few years, and this was a rare move to the upside tor the issue.
BofA Earnings Do Not Disappoint
After solid earnings reports from the big banks resulting in a rally in the sector Tuesday, Bank Of America Corp (NYSE: BAC) delivered a 24-cent EPS beat and a slight sales beat.
For short-term traders looking to trade the issue from the long side, the top of Tuesday's range ($30.24) was identified as a potential area of support.
At this time, the stock has bottomed just below that level, closing Wednesday's session 1.48% higher at $30.17.
Chaikin Joins Thursday's Show
Midway through the show, Tom Bowley of EarningsBeats.com joined the broadcast with an extremely bullish view of the market. Bowley was able to augment his bullish thesis with a series of charts tracking 100 years of market history.
On Thursday's show, Marc Chaikin of Chaikin Analytics will join the crew with updates on his Chaikin Money Flow Indicator.
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 iTunes, Google Play, Soundcloud, Stitcher and Tunein.
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