At the top of Monday's PreMarket Prep show, the news that Chinese officials do not anticipate a quick resolution to the long-standing trade war was identified as the catalyst for the reversal from Friday's strong close.
Buy The Dippers Lurk After Lower Open In Index Futures
Futures bottomed just after 6 p.m. Sunday night opening print and distanced themselves from that low, implying that "buy the dippers" were still lurking, as exhibited by the market's reluctance to crater.
From a technical viewpoint, the "buy the dip scenario" will not be complete until the December futures reach Friday's close of 2,951, the second-highest close for the volatile week.
Tariff News Dictates Solar Sector Price Action
Before the open, the Trump administration eliminated exemptions to solar import tariffs.
In premarket trading, the news was having the most positive effect on First Solar, Inc. FSLR, which would benefit from a change in tariff policy that will tax foreign solar products at 25%.
Co-host Dennis Dick, who is a shareholder of First Solar around the $60 area, said he intends to use the unexpected rally to exit or reduce the size of his position.
His reasoning: poor price action over the last eight trading sessions. The stock fell from its Sept. 23 close ($67.31) to a low on Thursday ($54.77) before ending the week at $57.17.
Wariness of overhead supply from traders and investors caught in the sharp decline dictated Dick's move to sell the opening print at $52.20, he said. The stock was down 3.53% at $57.22 at the time of publication.
Notable Ratings Change
Citigroup is hoping to a hitch a ride in a potential rally in Uber Technologies Inc UBER: the sell-side firm upgraded the ride-hailing company from Neutral to Buy with a $45 price target.
Uber made a quad of lows from the last four sessions between $28.31 and $28.90. This technical formation often is a signal of larger players attempting to build a long position without instigating a large spike in price.
Traders and investors looking to get in on the cheap were encouraged to stalk Friday's closing price as a potential support point after Uber traded higher in the premarket session.
Buyers stepped in ahead of that level ($29.67), as $29.83 was Uber's early morning low Monday. So far, the rally has matched its Sept. 30 high ($30.74), reaching $30.75 before fading off that level. The stock was trading 2.49% higher at $30.41 at the time of publication.
Analysts Put On Happy Face For SmileDirectClub
After a disastrous market debut, opening well under its slated valuation and continuing lower, SmileDirectClub Inc SDC found some fans Monday on the first day after its quiet period expiration.
Five analysts initiated coverage with ratings ranging from Buy to Overweight and Outperform, with price targets spanning from $19 to $31.
Following a higher open and brief bump to $15.20, the stock has surrendered all of those gains and was down 6.52% at the time of publication at $13.76.
Chahine Joins Tuesday's Show
Midway through Monday's show, muni bond expert Cate Long was a guest on the show and commented on the Fed, "repo madness," the economy and the tenuous finances of the state of Illinois.
Tuesday's guest is Nic Chahine, the author of "Create Income With Option Spreads."
At 8:35 a.m. Tuesday, Nic will join the show and share his technical and fundamental takes on the markets and comment on issues of interest for the listening audience.
PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunes, Google Play, Soundcloud, Stitcher and Tunein.
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