PreMarket Prep Stock Of The Day: Pfizer

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

The market got the news it wanted to hear from Pfizer Inc. PFE at 6:45 a.m. EST Monday morning, that being the company has developed along with its partner, BioNTech SE BNTX a vaccine that is 90% effective in a Phase 3 study for the treatment of the COVID-19 virus.

Its historical price action in today's session makes it the PreMarket Prep Stock Of The Day,

Poor Long-Term Performance: Pfizer made its all-time high in December 2000 at $48.06 and retreated to end the month at $46. It has had its ups and downs along with the S&P 500 index, but has only once come within striking distance of that level in December 2018, when it peaked at $46.47, before heading in another extended decline.

While the S&P 500 index has yielded a 175% return, Pfizer has delivered a negative return of 15% since December 2000. Dividends received over that period of time cover some of the gap, but not nearly enough.

Recent Price Action: Although it hasn't had stellar long-term performance, it gave investors an opportunity to purchase the issue at a bargain price in March. After ending 2019 at $39.18, it traded over $40 for the first time since July 2019 when it peaked at $40.97 in January.

During the meltdown, it traded down to $27.88 on March 23, bottoming the same day as the S&P 500 index. That level coincided with its February 2016 low of $28.25. At Monday’s peak of $41.99, that marked a return of 51% off the March low.

Until Monday’s violent price action, the high following the March low was made on July 29 at $39.45.

Price Action During The Show: When the issue was being discussed on today's show, it was trading at $42. The author of this article was skeptical that it would open over $42 and noted the premarket high of $42.51. Dennis Dick, a long-term shareholder, was tempted to sell the issue but was worried about the potential tax consequences of doing so.

Both hosts encouraged investors in the issue that had targets being hit today, especially shorter-term swing traders, should consider taking some profit.

Price Action During The Regular Session: After a much higher open of $41.86 compared to Friday’s closing price of $36.40, it rallied to $41.99, but then ran into a brick wall of institutional sellers at $42 and sharply reversed course.

Instead of being able to exit on the issue into strength, it became a free for all whacking bids to exit on the retreat. The ensuing decline found support well ahead of the top of Friday's range ($36.72), only reaching $38.38 and is now trading actively in the mid-$39 handle.

The full discussion on the issue from today’s show can be found here: