Market Overview

PreMarket Prep Recap: Target Hits The Spot, Analyst Sparks Rally In Canopy Growth

PreMarket Prep Recap: Target Hits The Spot, Analyst Sparks Rally In Canopy Growth

There were plenty of market movers to cover on Wednesday's PreMarket Prep Show. To no surprise, a few retail stocks were in focus after earnings reports and one analyst made a bold call on Canopy Growth.

Hard To Find An Upside Target

It's hard to imagine Target Corp (NYSE: TGT) could match its price performance following its third-quarter report, but it did. Before the open, the company announced a beat of 17 cents along with a sales beat and raised 2019 guidance.

With the issue gapping up into no man's land, it was "too high to chase and too hot too short." The only significant data point was the pre-market high ($123.69) mentioned as possible resistance.

In the regular session, it surpassed that level reaching $126.06 and then retreated to the $124 area.

Home Depot Sets Low Bar For Lowe's To Surpass

After the shellacking Home Depot (NYSE: HD) took on Tuesday, investors weren't expecting a great quarter from Lowe's (NYSE: LOW). They were wrong.

In this morning's release, the company announced an EPS beat but came up shy on sales. In pre-market trading, all of Tuesday's losses were recouped and them some.

Since the issue was trading above its former all-time high ($118.23), once again the pre-market high at time of coverage ($120.67) was mentioned as potential resistance. Off the open, it exceeded that high, rallying to $121.22 and reversed course. The area of its former all-time high is providing some intra-day support as $118.06 is the current low for the session.

Not All Is Well On The Retail Earnings Front

Perhaps no sector instigates more large percentage moves in either direction off earnings reports than the retail sector. After the close on Tuesday, Urban Outfitters (NASDAQ: URBN) provided trading action on the downside after an EPS miss of a penny along with a small sales miss.

After hours, the issue plunged from Tuesday's close ($28.78) to a low of $23.90 before it mounted a rebound. The author of this article noticed that low coincided with a series of five consecutive lows at the $24 area from mid-September, making it a more relevant support level.

In choppy trading, the issue rallied off the lower open, but immediately retreated to $24 on the nose and is attempting to re-enter the $25 handle.

Bank Of America Provides A Spark To The Marijuana Sector

The marijuana sector, which has been smoked in 2019, certainly needed a catalyst to rally off and Bank Of America provided one with an upgrade of Canopy Growth (NYSE: CGC). The analyst said the company looks undervalued if it can surpass "now reasonable" EPS and sales estimates.

Co-host Dennis Dick noted the key technical reversal in the issue on Tuesday (when an issue is in a downtrend and prices hit a new low, but close near the previous day's highs) which would attract investors closely following the issue on a technical basis.

After a higher open, it dipped to $15.98 and rallied to $17.71. If the rally continues, the next daily high in the issue doesn't come in until its Nov. 13 high of $19.38.

Andrew Chanin Joins The Show

Midway through the show, Andrew Chanin, the creator the Procure Space ETF (NYSE: UFO) joined the broadcast to provide details on the new issue.

In extended coverage from 9:00-10:00 a.m. EST, Sean Udall, the CIO of Quantum Trading Strategies analyzed several issues, on a technical and fundamental basis, from our listening audience.

On Thursday's show, Mark Yusko, CEO and CIO of Morgan Creek Capital Management will be our guest at 8:35 a.m. EST.

Posted-In: PreMarket PrepCannabis Long Ideas Short Ideas Technicals Markets Trading Ideas Best of Benzinga


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