Market Overview

PreMarket Prep Stock Of The Day: American Airlines

PreMarket Prep Stock Of The Day: American Airlines

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

Russia told the world what we all wanted to here last night: that they have come up with a coronavirus vaccine that will start a Phase 3 clinical trial this week. That's giving a boost to almost all of the “reopening stocks” that are so often discussed on the show.

One issue getting a lift is American Airlines (NYSE: AAL) and is the PreMarket Prep Stock Of The Day.

Already Taxiing On The Runway: When trying to pick a bottom in an issue, the first thing that you want to see if it has at least stopped going down. Since peaking on June 5 at $22.80, a top that was spelled out on our June 5 broadcast by co-host Dennis Dick, finally found some institutional buyers at the $11 area in late July and early August.

Here is the clip from the June 5 show:

In 12 consecutive sessions from July 29 through August 4, the issue made its daily lows between $10.71 to $11.35, which is often a sure sign of the “big boys” stepping up to the plate.

At Least You Have An Out: When the issue began to lift off last week, it was discussed on the show as a possible long. The reason being if one missed the bottom and decided to purchase the issue in the $12 or $13 handle, a possible exit point could have been the low at the low of the move at $10.71.

Just What The Doctor Prescribed For A Rally: Early this morning, Russia made its surprise announcement. Although the top brass in Russia have hinted that one was in the works, it came as a shock that they were the first to come up with a potential vaccine.

After Monday’s strong close, the news nudged the indexes a bit close to all-time highs. As a result, the “reopening stocks” were the ones benefiting most from the unexpected news.

Price Action When Being Discussed On The Show: When the issue was being discussed on the show, it was trading in the $15 area. Dennis Dick cautioned about “chasing the issue up here.

"[I] could not come in and get all excited and buy the stock at these levels, especially since you are buying the issue from investors that purchased the shares in the $11 and $12 area," Dick said. "If you are buying it here off the open, you are doing it wrong."

Price Action Off The Open: After maintaining the $15 level until the open of the regular session, it managed to reach $15.09, which was just shy of the premarket high ($15.25) and sharply reversed course. The ensuing decline took the issue within 8 cents of Monday’s close, bottoming at $14.08.

Since reaching that low it has rebounded back into the mid $14 handle as of 12:45 p.m. EST.

The full discussion on the issue from today’s show can be found here:


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