PreMarket Prep Stock Of The Day: Nvidia Bucks The Trend

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.

On days like today, with indexes deep in the red, there are always a few stocks that buck the trend and move higher. One of those stocks is NVIDIA Corp NVDA.

Pre-Split Rally: Before the open on May 21, Nvidia announced a 4-for-1 stock split and the rally off the announcement didn't end until July 7, when it peaked at $835. That represents a 43% increase from its closing price ($584.50) preceding the split announcement.

Retreat From High: A majority of the decline took place last week. After ending last Monday’s session at $820.50, within striking distance of its all-time high, the issue had a sharp four-day decline.

While the issue fell from $820.50 on Tuesday to $758.65 on Thursday, the weakness in the indexes sent the issue skidding another $32.21 to $726.44 to end the week.

Monday Mayhem: Nvidia wasn't spared in the premarket from the carnage in the indexes. A steady stream of sellers kept the issue in the red, but it found a bottom on its own just after 9 a.m. EST at $711.

That premarket low came in just above its June 17 low ($710.25) and just below its June 21 low ($712.91).

One Bold Call: When the issue was being covered on Monday’s show, it was trading at the $715 area. With the issue to begin trading on a split-adjusted basis on Tuesday, it caught Dennis Dick’s attention.

"It has not been running into the split date as of late, which issues usually do," he said. "I am going to keep a close eye on the early price action for a potential long day trade.”

He added: “You do have some investors that are short the issue, that would rather cover than get assigned more shares after the split."

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

Price Action During Regular Session: After a $10 lower open, the issue fell another $2 to $714.62 and sharply reversed course. Despite the indexes adding to its steep early losses, Nvidia embarked on a substantial rally.

The issue rallied to $761.68 and backed off to close at $751.19, up 3.4%. If the rally continues tomorrow, Friday’s high ($766.28) may come into play.