PreMarket Prep Stock Of The Week: 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.

By far, the most volatile up-and-down price action this week has been in the shares of Virgin Galactic SPCE, making it the PreMarket Prep Stock of the Week.

Monday: 'To The Moon, Alice': Well, not exactly. Following a huge up day last Friday ($40.26-$55.91) off approval from the FAA for a commercial launch, traders were prepared for a retest of the all-time high that was made in February ($62.80).

The issue did sniff that level in premarket trading, but when the liquidity came in during the regular session, it put in a double top (Friday’s high of $57.29 and Monday’s high of $57.51) and by the end of the session, Virgin Galactic was in the red by $1.07, falling from $55.91 to $54.84. 

Tuesday's Technical Difficulty: With no compelling news out on the issue, the $2-plus lower open took some fuel out of the rocket's tank.

When it was unable to regain the close, peaking well ahead at $53.60, the complexion of the issue changed from selling on strength to selling into weakness, a much more difficult task.

The crash landing found support just above its June 25 low ($45.87) at $45.97 and had a small lift into the close. For the session, it was deep in the red by $7.82 ($54.84 to $47.02).

Debbie Downer Wednesday With Double Downgrade: It is not often that a Wall Street firm will downgrade a stock, let alone hit it with a double downgrade.

In other words, instead of taking the incremental step pf going from Buy to Hold and then later on to Underperform, BofA Securities skipped the middle rating altogether on Wednesday. 

With the bulls already gasping for oxygen after Tuesday’s rout, Virgin Galactic had a  much lower open ($44.42 vs. $47.02) Wednesday. It continued lower but found buyers early on and rebounded to close well off that low.

It did briefly clear Tuesday’s close ($47.02), reaching $47.98, but still ended the day in the red by $1.02 at $46.

No Love From Cramer Thursday: Before the open Thursday, CNBC’s Jim Cramer called the issue “a very expensive stock," adding that it had a nice run, but he would look elsewhere.

The CNBC host said he's unbothered by class action lawsuits against the company. 

Without Cramer’s blessing and the issue already in retreat mode, it struggled the entire session.

After a flat open, it rallied above the close to $46.43 and reversed course. The ensuing decline took the issue down to and settled just above Wednesday’s low ($43.08) at $43.19, the exact low for the session.

Relaunch Of Share Price Aborted Friday: Just after 6:15 p.m. EST on Thursday, the company announced the flight window for its next rocket-powered test flight of its SpaceShipTwo Unity will open on July 11, which may have been sooner than many expected.

Company Chairman Richard Bramson will be on the mission.

More importantly, it almost guarantees the flight will take place before its main competition (Jeff Bezos' Blue Origin), which is currently scheduled for July 21.

PreMarket Prep At The Controls: At the top of Friday show, the news and corresponding price action were discussed in great detail. The implications for the price action in Friday’s session were discussed at the 11:41 mark.

When the issue was being discussed on the show, it was trading at the $53 area. Co-host Dennis Dick quickly determined that investors who bought near the premarket high ($59.22) “were going to lost money, perhaps even more later on.”

The author of this article alerted investors the issue needed to clear the recent high for move ($55.91) or even the second highest close of the move ($54.40), or it was more likely to fade.

Virgin Galactic's Price Action Off Open: Virgin Galactic held on to most of its gains into the opening bell and took a run at the aforementioned closes on Friday, but only reached $54.40 before sharply reversing course.

It's in no danger of going red for the day after being higher by $16 in the premarket and $11 during the regular session.

The stock was up 5.26% at $45.46 at last check. 

Photo: courtesy of Virgin Galactic.