PreMarket Prep Stock Of The Day: Lordstown Motors

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.

In these markets, you can't only rely on technical analysis as good or bad news can trump the greatest technical set-up instantly. One company that can't avoid negative news as of late is Lordstown Motors RIDE.

The Company: Lordstown Motors Corp is an automotive company founded for the purpose of developing and manufacturing light-duty electric trucks targeted for sale to fleet customers. The company has been developing its flagship vehicle, the Endurance, an electric full-size pickup truck.

Ugly Chart Since February: It wasn't too long ago that the issue was trading its all-time high ($31.80). In fact, it traded as high as $31.57 on Feb. 11, but has been under selling pressure ever since.

Short Seller Attack: With issue well off its all-time high, closing March 11 at $17.71, Hindenburg Research attacked the company, going for the jugular when it alleged fraud in its business operations.

That instigated another leg lower, as the issue swooned from $17.71 to $14.78 on March 12. After the accusation, any and all rallies were met with a barrage of sellers that were stuck long the issue at much higher levels.

Pre Earnings Rally Derailed: In the four days prior to its first-quarter earnings report, the issue had a 74% gain, rallying from its all-time low on May 13 ($6.70) at $11.65 on May 19. The next day Wolfe Research put the kibosh on the pre-earnings rally when it downgraded it to Underperform and lowered its price target to $1. That instigated a sharp retreat from $11.65 to $9.70.

Earnings Day Low And Rebound: The Street wasN'T satisfied with its earnings report, which indicated lower production of vehicles than previous projections. After a lower open, it traded down to $7.88, a level that hasn't been revisited ever since, and rebounded to close at $8.45.

Once again, the issue had a strong rebound and rallied all the way to$14.73 in the next six sessions, but retreated to close at $13.25.

Yo-Yo Price Action: Over the last six days, the issue has traded in a wide range from $8.88-$15.80, reacting to good and bad news and ended last week almost in the middle at $11.41.

Changes In The C-Suite: Before today's open, Lordstown announced a slew of management changes, including the exit of CEO Steve Burns and CFO Julio Rodriguez. With the company already under scrutiny, this was another blow to investors in the company.

Price Action And PreMarket Prep Take: When the issue was being covered on the show, it was trading at $9.70 area.

“The issue has battled back from bad news so many times, but this time I'm skeptical,” said Dennis Dick. "The line in the sand for me is the June 9 low of $8.88. If that holds, it may have a chance to rebound.”

After a lower open, it attempted to rally but was turned back at $9.85 and continued is moving lower. It did find support just above the aforementioned low at $8.91 and has rebounded back into the mid $9 handle as of 1:45 p.m. EST.

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