PreMarket Prep Recap: Breaking Down The Reaction To Walmart And Nvidia Earnings

In addition to previewing the upcoming trading session on the PreMarket Prep Show, we often review the trading action from the previous day to identify potential trades.

Ugly Day In Walmart

Before the open on Thursday, Walmart WMT announced an EPS beat along with a slight sales miss. The company raised 2020 EPS guidance.

That dose of good news had the issue trading well above its all-time high ($120.71) from Wednesday at the $125 area. The pre-market high of $125.69 was mentioned as a target for a long or for a potential short.

Off the open on Thursday, the issue gobbled up the institutional sellers at $125, raced to $125.38 and sharply reversed course. In fact, the issue had step-down sellers for the remainder of the day and ended the session in the red by 33 cents at $120.65.

On Friday's show, co-host Dennis Dick warned that big fat red candle could be a tell for the upcoming as overhead supply would be forming in the issue. In other words, would-be sellers of the issue that were working for a continued breakout now will have to lower their offers in order to exit.

After a flat open, the issue attempted to rally but found sellers just above the close at $121 and began to head south. The ensuing decline breached Thursday's low ($119.51) and has yet to find a bottom.

What To Make Of The Move In Intelsat

One issue we didn't cover this week was Intelsat I. The combination of a liquidation in the issue by Appaloosa and a JPMorgan downgrade instigated a 50% decline from last Friday's close ($23.92) to its low on Thursday at $11.20. JPMorgan cited complications with the company's ability to sell wireless C-Band spectrum to 5G internet providers.

Co-host Dennis Dick expressed no desire to invest in the issue at any price since he doesn't follow it closely. He cautioned to at least wait for it to stop going down before getting involved. The author of this article urged investors that were trying to pick a bottom in today's session to use Thursday's low ($11.20) as a potential exit point if a rally does materialize.

After a higher open, it had a brief pullback to $12.40 and rallied into the $14 handle.

Wild Ride In Nvidia

Nvidia NVDA announced a third-quarter earnings and sales beat. In volatile after-hours trading, the issue had a range from $202.58 to $218.35 in the first four minutes following the release.

Since it had an extended rally going into the report, Dennis Dick wasn't so sure that beat was big enough to instigate another leg higher. Investors were encouraged to be cautious on the long-side if it was unable to hold Thursday's closing price of $209.79, which represents its highest close of the year.

After a flat open, it rallied to $211.78 and reversed course. The ensuing decline took the issue to $200.84 and is consolidating at the $205 area.

Christian Fromhertz Joins The Show

Midway through the show Christian Fromhertz, CEO of Tribeca Trade Group joined the broadcast. He commented on the overall market and several issues that were in his portfolio.

On Monday's show, Alan Brochstein, author of the 420 Investor Newsletter will be our guest and he will assess the carnage in the marijuana sector.