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PreMarket Prep Stock Of The Day: Walmart

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PreMarket Prep Stock Of The Day: Walmart

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.

All the major bidders for TikTok are turning out to be winners. Some bigger than others, at least when referring to the rapid appreciation of their share price since entering the fray. Of the three, the most muted rally has been in shares Oracle (NYSE: ORCL); Microsoft (NASDAQ: MSFT) has blasted by its former all-time high from Tuesday ($216.61), reaching $231.15 on Thursday; but the rally in Walmart Inc (NYSE: WMT) is remarkable and is the PreMarket Prep Stock Of The Day.

Retreats Despite Q2 Beat: As a result of remaining open throughout the pandemic along with a robust online business, the company posted a huge second-quarter beat for EPS (31 cents) along with a sales beat of $2.37 billion. Since the issue had rallied its June lows at the $118 area to a new all-time high at $136.13 a day prior to the report, it turned out to be a “sell the news” event.

On the day of the report, it did manage to make a new all-time high ($137.63) but weakened to end the session at $134.71.

No New Catalyst, Slow Drift Lower: Over the next six sessions it moved lower before putting in a double bottom Tuesday ($129.67) and Wednesday ($129.70) and embarking on the extraordinary rally.

When rumors began to circulate it was entering the TikTok bidding war, it exploded to the upside. After ending Wednesday's session at $130.70, it caught a major bid off the open on Thursday and never looked back.

After surpassing its former all-time high midday, the momentum carried the issue all the way to $139.25, before retreating to end the session at $136.63.

Two-Day Move: Follow-through in the after-hours and pre-market trading propelled the issue to $141.60 around 5 a.m. ET. The oversized move for the stodgy issue was discussed on today’s Premarket Prep Show.

"I cannot understand the day two-day move of sever percent, especially when it was reported that Twitter offered $10 billion and they wanted $30 billion," said co-host Dennis Dick.

Show producer Spencer Israel went on to explain how valuable the platform can be and “how much product is pushed on these platforms.”

The only technical level of interest mentioned on the show was the pre-market high ($141.60) as a potential target on the long-side.

Price Action During Regular Session: After a higher open, it rallied only another nickel to $141.05, which was shy of the pre-market high, and reversed course. The ensuing decline was within Thursday’s range, but found buyers well ahead of Thursday's closing price, only reaching $137.84 and resumed its move higher.

As of 2 p.m., it has grinded its way back toward the upper end of the range and attempting to post its first close ever over $140.

The full discussion on the Tik-Top sweepstakes can be found here:

 

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