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.
Trying to pick a bottom in an issue that has been in an extended decline is very difficult. When it appears that an issue has put in a significant low and then announces earnings, forecasting how it will go is equally as challenging. This exact scenario applies to FuboTV Inc. FUBO.
The Company: FuboTV Inc is a sports-first, live TV streaming company, offering subscribers access to tens of thousands of live sporting events annually as well as news and entertainment content. Its platform, fuboTV, allows customers to access content through streaming devices and on SmartTVs, mobile phones, tablets, and computers.
The Pain Trade: It has been mostly downhill for the issue since it peaked in December at $62.29 after rising from $9 in October. Until Monday, the issue had been lower in eight of the last 10 trading sessions with the two outliers being minimal gains of $0.12 and $0.14. During that time period, it declined from its April 27 close ($22.11) to end last week at $16.35.
Any investor trying to pick the bottom either had to take a quick profit or exit on retreat.
Capitulatory Bottom: All extreme moves, up or down, come to an end eventually. On the downside, it takes place when the longs can no longer take the pain and exit the issue in unison. On Monday morning, this took place in several growth stocks as they bottomed just after the open at depressed levels and many ended the day in the green; FuboTV was one of them.
Following a much lower open ($14.83 vs. Friday’s close of $16.35), it only went $0.19 lower to $14.64 and sharply reversed course. That low came at the upper end of the range of six consecutive lows from $14-$14.60 from Nov. 3-10.
The issue was able to rally $3 off the low to peak at $17.75 and ended the session in the green by $1 at $17.67. It should be noted the rally took place much heavier than average volume.
Q1 Sales Beat: After the close on Monday, the company reported an EPS loss of 55 cents, but surprised on the upside for sales: $119.70M versus the $103.79 million estimate. Also, subs increased to 590,430, which was up 105% year over year. The company expects this momentum to carry for both as they raised guidance.
Price Action And PreMarket Prep Take: When the issue was being covered on the show, it had already backed off its premarket high of $22.67 and was finding sellers at the $21 area. Both hosts of the show were cautious on the rally continuing as it already rallied 43% off Monday’s low at $21. The author of this article suggested short-term traders may want to ring the register from Monday’s purchase on the cheap and exit the issue.
After a higher open, it rallied another $0.20 to $21.38 and reversed course. It has continued to make lows for the session. As of 1:30 p.m., it has so far reached $18.85 and now attempting to remain in the $19 handle.
The full discussion on the issue from Tuesday’show can be found here:
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