PreMarket Prep Stock Of The Day: Virgin Galactic

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.

Several issues that went into orbit last week have come back to earth. One that has not is Virgin Galactic SPCE.

The Company: Sir Richard Branson founded the Virgin Group in the 1970s, which consists of more than 400 companies. One of its better-known companies is Virgin Atlantic Airways and laid the foundation for the company Virgin Galactic, which is a spaceflight corporation designed for space tourism.

Last Week’s Price Action: After ending the Jan. 22 trading session at $34.28, SPCE blasted to a new all-time high last Wednesday (Jan. 27) at $59.43 and backed off to end the session at $46.35. Some profit-taking at the end of last week nudged the issue back to $44.29 to end the week.

Lift-Off On Monday: Before Monday's open, the company announced a new flight window set VSS Unity Rocket-Powered Flight from New Mexico, with the window opening on Feb. 13.

That news took precedence over Morgan Stanley's downgrade of the stock. Analyst Adam Jonas lowered his rating from Overweight to Equal-Weight but raised his target from $24 to $30, which was still a discount to Friday’s closing price ($44.29).

During the day the issue received another boost when peer SpaceX announced It will send four space tourists to orbit earth on the “world’s first all-civilian mission."

By day’s end, SPCE peaked at $57.24 and posted a new all-time closing high by a wide margin at $53.79.

After-Hours And PreMarket Buying Frenzy: Buyers continued their buying spree in the after-hours and ended the 8 p.m. session at $58.77. The surge continued off the open of the premarket session and actually reached $62.90. The lofty premium to Monday’s close attracted sellers and the issue was not able to sustain the $60 level.

When the issue was being discussed on the show, it was trading at the $57 area. Dennis Dick, who is long shares of the issue, stated, "it is definitely overbought, but I already sold some, so I may just hang on to the remainder."

The author of this article encouraged investors to focus on its all-time closing price high from Monday ($53.79) and as a level, if breached, may instigate more selling.

In a volatile session, SPCE peaked at $58.60 off the open and reversed course. The ensuing decline took the issue to $48 and it has rebounded back into the lower $50 handle.
The full discussion on the issue from today’s show can be found here:

Disclosure:  Dick did trim some of his long position, but still remains long the issue.