PreMarket Prep Stock Of The Day: JD.com

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.

Earnings from the retail sector are on the docket this week and JD.com Inc. JD got the sector off to a good start, making it the PreMarket Prep Stock Of The Day.

What They Do: JD.com is China's second-largest e-commerce company after Alibaba in terms of transaction volume, offering a wide selection of authentic products at competitive prices, with speedy and reliable delivery. The company has built its own nationwide fulfillment infrastructure and last-mile delivery network, staffed by its own employees, which supports both its online direct sales and its online marketplace businesses.

CEO Troubles Exerts More Selling Pressure: In September 2018, billionaire CEO Richard Liu was arrested by Minneapolis police on suspicion of alleged sexual misconduct involving a female student at the University of Minnesota.

At that time, the issue had backed off its all-time high that was made in January 2018 at $50.68 and ended its Aug. 31 session at $31.30. With the news coming out over the Labor Day weekend, investors didn't have a chance to react until Sept. 4, when the issue skidded from $31.30 to $29.43. More damage was inflicted on the issue the following day, when it collapsed to $26.30.

The retreat continued year-end, when it put in a pair of daily lows at the $19 area and bounced to end the year at $20.93.

CEO Exonerated: The low for move coincided perfectly with the local authorities announced that they would not be filing charges in the case. That news instigated basically an uninterrupted rally took the issue back over $43.08 in February 2020.

Excellent Relative Strength During Meltdown: While the issue did retreat in March, it didn't endure the shellacking of the broad market and other retailers. Its low for the downdraft was a few days ahead of the broad market, when on March 16 it fell to $32.70, but rebounded to end the session at $38.35.

Straight-Up To New All-Time High: Similar to other online retailers, the issue galloped to a new all-time high in July at $59.18 and had backed off that area ahead of the report as it ended Friday’s session at $62.06

Before today's open, JD.com reported a second-quarter EPS beat of 12 cents along with a sales beat of about $1 billion.

Price Action During Show And Regular Session: When the issue was being discussed on the show it was trading at the $66.30 area, with the pre-market high of $66.59 already in place. The author of this article noted that level would be a nice target, but the issue would have to breach the pair of highs at the $65.60 area first.

After a higher open, it reversed course but found support just below Friday’s high ($62.90) at $62.50 and has rallied back to make a high for the session at $65.54 as of 11:45 a.m. EST.

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