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PreMarket Prep Recap: 'Mad Money' Follies And Buffett Hits Another Home Run

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PreMarket Prep Recap: 'Mad Money' Follies And Buffett Hits Another Home Run

After-hours price action in Avita Medical Ltd. ADR (NASDAQ: RCEL), a blockbuster earnings report and a significant ratings change were a few of the topics on today's PreMarket Prep Show.

Buyer Beware Of Stocks On 'Mad Money'

On Wednesday morning, it was announced Avita Medical's CEO was going to be on CNBC's "Mad Money" program Wednesday evening.

In anticipation of the interview presenting the company in a favorable light, investors aggressively purchased shares of the issue in Wednesday's session, climbing from $7.84 to $8.56.

Those investors were not disappointed as the CEO stated the company's technology was revolutionizing care for burn patients. On heavy volume, traders took the issue up another 20% from its close to $9.80 and then the hammer came down. It should be noted the after-hours high matched its high from Oct. 23 and was a few pennies shy of its all-time high from Nov. 8 at $9.82.

After the issue peaked at that level, a super aggressive short-seller came in and pounded the stock. Co-host Dennis Dick, who got caught up in the fracas, recognized the seller as a short seller since the issue had already exceeded price limits for the day and as a result, shorts could only be initiated on an uptick. Therefore, the seller could not smash bids, but had to get lifted on the offer to initiate the position.

The relentless step-down short seller walked the issue down to $8.18 by the end of the after-hours session. The trader may have covered at that level as 160,000 shares traded in the final 15 minutes.

In today's session, the issue found resistance just above Wednesday's close at $8.60 and is trading in the red.

When Restoration Hardware Rallies, Get Out Of Its Way

After Wednesday's close, RH (NYSE: RH) blew away third-quarter estimates and also raised EPS and sales guidance.

The report had the Warren Buffett-owned issue firmly in the green trading above its all-time high from Monday at $208.33. The author of this article noted a possible seller at the $212 area (pre-market high at the time). Dennis Dick warned that once an issue clears an all-time high, there is no resistance and to get out of the way.

Buffett's Berkshire Hathaway bought RH earlier this year.

After a higher open, it had a brief retreat to $209.15 and is approaching $230 at the time of this article being written.

Nike's Run On The Upside Continues After Goldman Sachs Upgrade

Before the open, Goldman Sachs upgraded Nike (NYSE: NKE) from Neutral to Buy and added it to its Conviction Buy list and announced a price target of $112.

On this occasion, traders faded the upgrade as so far has used the upgrade to take profits in the issue. After a higher open, it rallied to $95.90, which was just under the pre-market high of $96 and reversed course.

The issue has drifted lower, but is still in the green by $1.70. The issue's all-time high stands at $96.87.

Jerremy Newsome Joins The Show

Midway through the show, Jerremy Newsome, the founder of Reallifetrading.com joined the broadcast. He discussed his bullish and bearish set-ups for today's session.

On Friday at 8:15 a.m. EST, Fari Hamzei, the founder of Hamzei Analytics, will share his colorful commentary on the markets.

Posted-In: Mad Money PreMarket Prep Warren BuffettLong Ideas Short Ideas Technicals Trading Ideas Best of Benzinga

 

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