PreMarket Prep Stock Of The Day: GrowGeneration

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.

As a result of the potential change of leadership in our country, issues in the marijuana sector have been in the spotlight. Several of them had a nice rally into the election but the follow-through in the sector has been mixed.

GrowGeneration Corp GRWG, one of the top performers in the sector, announced third-quarter earnings after the close on Wednesday and is the PreMarket Prep Stock Of The Day.

Long Consolidation And Breakout In 2020: GrowGeneration spiked to $20 in January 2018, but retreated to end the month at $6.27. Following that it fell in a trading range that persisted until June 2020. During that period it traded between $2.05 and $6.97, with the majority of the price action taking place in the $3-$5 area.

After revisiting the lower end of the range in March, reaching $2.52, it reached the top of the range in May and broke out to the upside in June and kept going. In a volatile fashion, it worked its way up to make a new all-time high on Monday ($24.94) but sold off for the remainder of the day to close at $21.53. The issue posted its all-time closing high last Thursday at $23.04.

Profit-Taking Ahead Of Q3 Report: Following the all-time high investors decided to take some profits heading into Wednesday's report. Over the next three sessions, it fell as low as $18.31 on Tuesday but bounced back to end Wednesday’s session at $20.94.

After the close on Wednesday, the company announced an EPS beat of a penny and a sales beat of $7.58 million, as well as raising sales guidance.

Price Action During Show: When the issue was being covered during the show it was trading at the $22.60 area. Co-host Dennis Dick proclaimed it was a very important day for the issue.

"[This] needs to hold these gains and keep on going," he said. "This was at $2.50 in March. You're going to need some aggressive buyers to keep the rally going."

With the after-hours high already being in place at $23.87 and the issue now trading $1 under that, the author of this article suggested investors focus on its all-time closing high ($23.04), which was buffeted by another close in that area on Nov. 6 ($22.98).

Price Action During The Regular Session: After a higher open, it went lower finding support just above Wednesday's close $20.94, only reaching $21.13 and sharply reversed course. As of 12:30 p.m. ET, it has climbed into the $24 handle. Reaching $24.25 and is attempting to make a new all-time closing high.

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