Are You Selling IBM Just Because Buffett Trimmed His Position?

Did you miss today's PreMarket Prep? Here are some of the highlights from the show.

Is The IBM Move Exaggerated?

Shares of International Business Machines Corp. IBM opened in the $153 handle, down $6 from the close, after overnight news Warren Buffett had cut his position. Co-hosts Joel Elconin and Dennis Dick debated whether the move was too extreme. 

Elconin believes, while a lot of the move is likely people panic selling, some of the move could be the result of shorts who, in order to bring in their positions, are sacrificing a few shares on the long side to gauge the stock's temperature.

Dick was more concerned with the sheer magnitude and what it says about market participants as a whole.

"All my argument is, is there are so many people who aren't thinking for themselves anymore, they listen to what everyone else says, and they think, 'Oh, Warren's selling? I'm selling too.' It's just like people don't think for themselves anymore. It drives me nuts," said Dick. Listen to the full discussion here. 

Key Technical Levels

The following are just a few of the stocks discussed on the show. 

Shake Shack Inc SHAK took out its all-time low after Thursday's earnings. Elconin noted five recent highs in the mid $45 level, and that the stock could run if it breaks through that resistance.

Activision Blizzard, Inc. ATVI was hit after earnings, despite decent numbers. The stock has a triple top at the $53.35 area from the last three sessions. $53.10 is the all-time high closing price. "That's the number of the day."

Herbalife Ltd. HLF has been pretty range bound over the last four years between $30–$80. $70 is a psychological level with some resistance (Elconin noted a high of $69.40 from August 2016).

Shorting Crude And Natural Gas

Salem Abraham, president of Abraham Trading, joined the show to talk about his trading in the commodities markets. Abraham said he's recently taken a short position in the crude oil and natural gas markets, and is expecting more weakness over the next two to four weeks.

"Over the last three to four days we've taken some short positions in crude oil and natural gas. We don't have a target...we just look for weakness and then we feel like there's going to be some follow through. Certainly in the last week, those markets have shown some weakness and enough weakness for us to be concerned that they're going to continue down." Listen to the full interview with Abraham here.

Upcoming: On Next Week's Shows

Coming up next week we'll be joined by investment coach Sasha Evdakov, technical analyst Tom Asprey, Simpler Trading's Bruce Marshall and trading educator Mish Schneider, to name a few. You can catch the full schedule at the bottom of this page.

How To Listen And Watch

PreMarket Prep is a daily trading ideas show with a focus on pre-market volatility and technical setups. You can listen live and chat with our hosts, guests and listeners every morning from 8–9 a.m. ET here or on YouTube Live. You can listen to the podcast on iTunes, Soundcloud and Stitcher. The full recording of today's show is available below.