PreMarket Prep Recap: Q3 Earnings Season Coming To An End, Tesla Still Looks Toppy

With earnings season winding down, there were quite a few reports to cover on Tuesday's PreMarket Prep.

Dollar Tree Trimmed After Q3 Miss

Dollar Tree DLTR shares are under extreme selling pressure after reporting a third-quarter EPS miss along with a slight beat for sales. The company lowered 2019 sales guidance to the lower-end of the range.

There was one main thing evident from the trading action in Dollar Tree from the after-hours and pre-market trading sessions. That being there was a step-down seller (continuously offering at lower prices) in the issue that just wanted out. With that being said, investors were encouraged to not try and pick a bottom in the issue.

After a lower open, the seller(s) backed off for a few minutes which enabled it to to rally $3 to $98.98 before continuing its downward spiral. It has blown through all the monthly support levels mentioned on the show, found intra-day support at $93.25 and staged a rebound.

Tesla Still Under Selling Pressure

On Monday's show, the pre-market rebound in Tesla Inc. TSLA was met with skepticism from the hosts of the show. Since the issue had a major rally off its earnings report, the rollout of its Cybertruck has attracted more sellers than buyers. During Monday's broadcast, co-host Dennis Dick speculated the issue may have reached a short-term top.

The decline from Monday's session continued in today's session. Some of the decline can be attributed to a downgrade from lesser-known China Renaissance research firm.

After a lower open, it was unable to recoup Monday's closing price ($336.54), only reaching $335.50 before continuing lower. It breached Monday's low ($334.45) and is continuing to make new lows for the session.

Reading The Tea Leaves The Wrong Way In Palo Alto Networks

Interpreting pre-market and after-hours trading action can can be tricky. For Palo Alto Networks PANW, a slight beat for EPS and sales couldn't offset lower EPS guidance.

The author of this article wrongly interpreted the pre-market trading action in the issue. After its initial plunge, there were persistent buyers in the $229 area heading into the open. Since the issue held in that area for so long, a bounce in the issue was anticipated. The correct interpretation would have been, buyers were present, but the sellers weren't done yet.

After opening at the pre-market low, it rallied only 41 cents to $228.41 before continuing its decline. The ensuing decline has taken the issue to $223.09 and is attempting to rebound.

2 Guests On Tuesday's Show

Fifteen minutes into the broadcast, Ryan Craver, Retail Expert and Founder Of Commerce Canal and dissected earnings reports from the retail sector.

Later on, Scott Bauer of the Prosper Trading Academy joined the crew and urged caution in the raging bull market. Also, he shared a few good stories from the trading floor, which are cherished from our listening audience.