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PreMarket Prep Recap: Finding Resistance In Nike, Cintas After Q1 Beats

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PreMarket Prep Recap: Finding Resistance In Nike, Cintas After Q1 Beats

At the top of Wednesday's PreMarket Prep show, the impact of the possible impeachment of President Donald Trump was discussed through the lens of Tuesday's price action and looking forward. 

While Speaker of the House Nancy Pelosi's announcement of an impeachment inquiry did factor into the decline, the market exhibited weakness ahead of the development, and it only added to the downward momentum.

The investigation could be a long one, and PreMarket Prep producer Spencer Israel said he views the decline as another "buy the dip" opportunity. 

Nike, Cintas, Tobacco Stocks

A solid first-quarter EPS and sales beat for Nike Inc (NYSE: NKE) had the issue firmly in the green in the premarket session Wednesday and way above its former all-time-high of $90.

From the premarket action, a seller was identified in the $92.50 level, which was the premarket high. Since it made a few attempts to clear that area, potential longs looking to exit the issue or aggressive shorts should see how Nike acts at this level.

As it turns out, the issue breached that level briefly, climbing to $92.79 before falling back into the $90 handle.

The stock closed Wednesday's session higher by 4.15% at $90.80. 

Not only did Cintas Corporation (NASDAQ: CTAS) announce good first-quarter results, it raised its 2020 guidance.

The double dose of good news had the issue recouping most of its losses from a rough three-day period (Sept. 9-11), when it fell rom its close Sept. 9 ($265.66) to $246.51 Sept. 11.

The high and the close from the onset of the decline ($267.56) to the end ($265.66) were cited as potential resistance areas during Wednesday's discussion. Cintas shares ended Wednesday's session up 5.74% at $266.62. 

With a proposed merger of Philip Morris International Inc. (NYSE: PM) and Altria Group Inc (NYSE: MO) off the table, both issues were in the green in premarket trading. Philip Morris peaked well below its premarket high of $80, only reaching $77.88 off the open and spending most of the session trading around the $76 area. The stock was up 5.23% at $75.30 at the close. 

Altria has not fared nearly as well, peaking just above its opening print at $41.65 before going into the red.

The stock is inching much closer to its multiyear low from Sept. 19 ($39.31). It was down 0.39% at $40.57 at the closing bell. 

Finally, crude oil traders were alerted that the November contract may fill the void in price created by the attack on a Saudi Aramco facility. The level that needed to be reached was $55.44. Buyers stepped in ahead of that level at $55.55, and it has rebounded back into the $56 handle. 

Midway through Wednesday's show, Anne-Marie Baiynd, author and CEO of thetradingbook.com, discussed what her technical indicators are forecasting in the indexes and went over her losing in trade in the Energy Select Sector SPDR (NYSE: XLE). 

Melvin Joins Thursday's Show 

On Thursday's show, Tim Melvin, the author of "Banking On Profits," will help identify value in the community banking sector. He's also expected to give his take on the Fed and the recent onslaught of overnight repos.

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 PlaySoundcloudStitcher and Tunein.

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Posted-In: Anne-Marie Baiynd PreMarket Prep Tim MelvinNews Technicals Top Stories Trading Ideas Best of Benzinga

 

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