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PreMarket Prep Recap: Lululemon Q3 Beat Not Good Enough, Huge Insider Sale At RH

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PreMarket Prep Recap: Lululemon Q3 Beat Not Good Enough, Huge Insider Sale At RH

The quiet markets during today's PreMarket Prep Show was no indication of the wicked rally that would take place just after the open. However, there were a few earnings report to discuss, a major rating change and a huge insider sale on the docket.

Lululemon Q3 Beat Not Enough To Sustain Rally

After the close on Wednesday, Lululemon Athletica Inc. (NYSE: LULU) announced an EPS and sales beat.

With the issue having such a big rally since its Nov. 5 low ($191.29), which peaked on Wednesday at $235.50, there were very high expectations heading into the report. Since those expectations were not met, there is some profit taking in the issue today.

During the show, it recovered from its pre-market swoon and was attempting to retake Wednesday's low ($228) and make a run at hits all-time closing high made yesterday at $233.19.

Off the open, it found resistance just above that level, peaking at $228.82 and resumed its mover lower. Since the issue was in an area of limited support, trying to pick a bottom in the issue was not recommended.

General Electric Get Some Analysts Love For The First Time Since January

UBS upgraded General Electric (NYSE: GE) from Neutral to Buy and bumped its price target from $11.50 to $14. Co-host Dennis Dick witnessed the price action in the after-hours session and estimated the upgrade could carry the issue as high as $11.50.

The timely upgrade along with the major rally in the broad market pushed to the issue to that exact level. That high matched its Dec. 2 high ($11.52) and coincided with the area of large institutional sell orders. Since reaching that elevated level, it has drifted to the $11.35 area.

A Whopper Of An Insider Sale At Restoration Hardware

Although insider buys have a more significant long-term impact on a company, large insider sales should certainly be noted. Before the open, it was announced RH (NYSE: RH) CEO Gary Friedman had sold 500,000 shares of common stock from Dec. 9-11. It should be noted the sale only represents 6.9% of his holdings.

Also, what is interesting is that the company issued a press release explaining the reasons for the sale, as to avoid panic by other shareholders of the company.

Since the issue had tacked over $40 since its solid earnings beat on Dec. 4, picking a bottom in today's session was going to be a difficult task. After a flat open, it found resistance just below its all-time closing price from Wednesday ($233.21) at $233 and has been drifting lower.

Apparently, other investors are following the lead of the company's CEO. At this time, the issue is trading lower at $222.21.

Marc Chaikin Joins The Show

Early in the broadcast, Marc Chaikin of Chaikin Analytics joined the crew. He discussed his bullish outlook for the market and his bearish outlook for Netflix Inc. (NASDAQ: NFLX).

On Friday at 8:35 a.m. EST, Paul Yook and Mark Charest, Ph. D, founding partners at LifeSci Ventures Partners will provide commentary on recent price in the always volatile biotech sector.

Posted-In: PreMarket PrepLong Ideas Short Ideas Technicals Trading Ideas Best of Benzinga

 

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