PreMarket Prep Stock Of The Day: Scienjoy

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.

In the current market environment, certain buzzwords instigate sometimes unwarranted price action.

The Company: Scienjoy Holding Corp SJ is a live streaming video entertainment social platform in China. The company operates a mobile live streaming business by which it provides live streaming entertainment from professional broadcasters to the end-users, allowing for the operation of live social video communities

The Magical Buzzword: Along with an increase in speculation in the cryptocurrency market, NFTs have benefited from the boom.

Simply stated, a non-fungible token is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items in many different forms including photos, videos, audio, and other types of digital files.

Second Go-Around: This is not the first time the company has instigated a spike higher with the type of announcement this month. On April 6, Scienjoy announced a strategic alliance with Snipp Interactive to launch new loyalty and rewards system and to explore Bitcoin and NFT rewards for its 250 million users and 300,000 broadcasters.

On that day in a wild session, the issue had a large range, with the low ($11.78) being $2 from its closing price (S9.31) and the high ($18.50) almost a double from the close. It backed off the high to end the session at $12.49.

It should be noted the issue has not seen that close until Monday’s session as traded as low as $8.37 on April 16.

Don’t Be Fooled Again: Before the open, after the company announced it launched NFTs on its live-streaming platforms, basically the same announcement from earlier in the month.

Of course, traders acted on the reproduced headline and the issue began to move higher. During the premarket session, it peaked at $13.78 and was trading at the $13 area when it was being discussed. Dennis Dick, when asked about the issue, did not mince words.

"The pop off the second time off the same headline, usually does not get as a big reaction to the upside," he said. "I am not chasing it here."

Price Action: The issue began to retreat heading into the open of the regular session as has traded no higher than $12.62 off the open and reversed course. As of 1:30 p.m., it has traded down to $10.80 and is attempting to remain in the $11 handle.

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

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