PreMarket Prep Recap: A Buy-The-Dip Opportunity?

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 iTunesGoogle PlaySoundcloudStitcher and Tunein.

Related Links: 

How And Why Are Online Brokers Offering Commission-Free Trades?

PreMarket Prep Recap: All About The Jobs Number

Posted In: Cate LongNic ChahinePreMarket PrepLong IdeasNewsShort IdeasTechnicalsTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.