PreMarket Prep Stock Of The Day: PayPal

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.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

Taking into consideration how far PayPal Holding Inc. PYPL had rallied off its March low and its gain of $8.33 ($176.27 to $184.60) or 4.7% on the day of its second-quarter report, the company was going to have to blow away the numbers for the rally to continue. And it certainly did, making it the PreMarket Prep Stock Of The Day.

Retreats With The Market In March: As the broad market was getting whacked in March, PayPal fully participated in the decline. In fact, its retreat from its February high ($24.03) to its March low ($82.07) of 34% about matched the decline in the S&P 500 index.

Its March low coincided nicely with its January 2019 low of $81.91.

Monster Rally Off March Low: While the S&P 500 index has recouped most of its losses from earlier in the year, it's still shy of its all-time high. Even before Wednesday's report, PayPal has exceeded its February high in and continued well beyond that, reaching $185.44 on Wednesday. This marked a 126% gain off the March low.

Big Beat: After the close on Wednesday, PayPal announced an EPS beat of 21 cents along with a sales beat of $310 million. The company expects sales growth of 23% in the third quarter and raised 2020 guidance.

After-Hours Price Action: Following a brief downtick to $183, its share price exploded, rallying all the way to $197 before falling back and ending the after-hours session at $191.69 on significant volume.

Price Action When Covered On The Show: When the issue was being covered on the show, it was changing hands at $192 area. Co-host Dennis Dick lamented that he owned the stock and wished he had never sold it. He wouldn't surprised if the issue saw $200 soon.

When reviewing the after-hours action, the author of this article noted the high of $197 and stated that if an investor was looking to exit the issue today, it would be a juicy target. On the downside, he noted the cluster of buyers at the $188 area in the pre-market session.

Price Action Off The Open: After opening at $192.25, the issue immediately spiked to $198.66, surpassing the after-hours high by $1.66 and sharply reversed course. The ensuing decline came up shy of the aforementioned $188 support level, only reaching $189.13. As of 12 p.m ET, it rebounded back into the lower $190 handle.

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