PreMarket Prep Recap: Looking Under The Hood Of The S&P 500 Index
Despite anticipating a slower day in the market, there were plenty of market movers to discuss on today's PreMarket Prep Show.
Looking Under The Hood Segment
Being astute followers of the S&P 500 index, the co-hosts will from time to time conduct an "under the hood" segment. This exercise is when the co-hosts take a brief technical look at the top 10 components of the index. The reason for this being those top 10 stocks comprises nearly 24% of the index.
In other words, the combined price of these issues dominates the overall price action in index. As you can imagine, all the charts looked pretty darn good.
Alibaba Hits It Out Of The Park On Singles Day
A common theme on the show when talking about a particular issue is whether or not there is a catalyst present to move an issue up or down. Simply having a great technical set-up may not be enough to create a trading opportunity.
The catalyst for Alibaba (NYSE:BABA) was the results from the Nov. 11 Singles Day event taking place. Although the issue was trading in the red, co-host Dennis Dick revealed how he traded the issue from the long-side that was yielding him a positive return.
The author of this article noted the run-up ahead of the issue and that its closing price from Friday ($187.18) as a key level for the issue to clear for the rally to continue. After some profit-taking off the open, the issue rebounded but so far has come up shy as $186.06 stands as the high for the day.
Taking A Closer Look At The Potential Xerox/HP Deal
Last week, there were rumblings that Xerox Corp (NYSE:XRX) may be making a potential bid for HP Inc. (NYSE:HPQ). That instigated a rally in HP that pushed the issue to $21.67. However, it surrendered much of its gains that day as it ended the session at $19.67. Interestingly, it has traded just above below that level since.
On Wednesday, it was reported Xerox made an offer valued at less than $23 per share. Therefore, the sellers near the $22 area on Tuesday appear to have made the correct move.
One of those investors cashing out on the news was Dennis Dick, a long-time holder of HP Inc. The rationale for his exit was the fear that the deal may flip and that HP Inc may acquire Xerox. If so, the Street could easily punish the acquirer, as it so often does, and put the issue where it was before the deal was rumored ($18.50) or lower.
Ivan Feinseth Joins The Show
On Tuesday's show, John Inch, Senior Analyst for Multi-Industrials for Gordon-Haskett will be our guest to update his current ratings in the sector.
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