PreMarket Prep Stock Of The Day: Snap Inc

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.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

With technology stocks being the leaders of the rally off the March low, their earnings reports will go a long way in determining whether the rally will continue. With the big tech guns yet to report, a smaller one, Snap Inc. SNAP, is the PreMarket Prep Stock of the Day. 

Snap's Major Rally Off March Low: Similar to the S&P 500 index and its components, Snap took a dive in February and March. While the index lost roughly one-third of its value, Snap was more than cut in half.

After peaking in January at $19.76, it did not find a bottom until March 18 at $7.89. That came in between its February 2019 low ($6.70) and its March 2019 low ($9.16).

Snap Weaker On The Way Down, Stronger On The Way Up: The rally off that depressed level did not end until July 8, when then issue peaked at $26.60 and reversed course. That easily exceeded its April 2017 high, but was well shy of its all-time high of $29.44 from March 2017. 

Some Profit-Taking Ahead Of The Report: After Snap's 237% rally off the March low, there were investors looking to take profits ahead of the report, and it dipped to $23.02 the day after its high for the rebound. 

It was able to recoup some of those losses ahead of the report, ending Tuesday’s session at $24.74.

After Stealth Rally, Snap Needed A Big Beat: On Tuesday after the close, the company announced a second-quarter EPS beat of a penny along with a sales beat of $21 million.

It was good, but not good enough to keep the rally going. Within minutes of the announcement, the issue swooned to $21.30 and quickly rebounded to end the after-hours session at $23.17.

Snap's Premarket Price Action Wednesday: While the report was being discussed on the show, the issue was still trading in the $23 area.

Based on the early reaction to the report, the hosts of the show agreed it was going to have a hard time reaching the bottom of Tuesday’s range at $24.58. 

The author of this article was skeptical Snap would reach the premarket low based on the quick rebound. The PreMarket Prep audience was alerted to a potential low based on the daily charts from June 30 at $22.68.

Snap's Price Action Off The Open: After a lower open, Snap managed a brief rebound to $23.79 before continuing its move lower.

The stock was down 6.98% at $23.05 at last check Wednesday. 

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