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PreMarket Prep Recap: Apple Q1 Beat Aids Rebound From Monday's Low

The price action off several earnings reports was the primary focus on Wednesday's PreMarket Prep Show.

Benzinga · 01/29/2020 17:48

The price action off several earnings reports was the primary focus on Wednesday's PreMarket Prep Show.

What To Make Of The Rebound Off Monday's Lows?

As bad as things looked Monday morning, they could not have looked prettier heading into Wednesday's open. In fact, the March S&P 500 futures nearly recouped all of Monday's losses and was in the vicinity of last Friday's close (3293.50).

Investors that were concerned with the potential negative effects of the coronavirus on the markets were alerted to review their portfolios with their investor representative to determine if it would be prudent to employ any hedging tactics at this time.

Hard Not To Love Apple's Q1 Report

Once again Apple Inc. (NASDAQ: AAPL) did not disappoint with its earnings report. The company reported an EPS beat of 45 cents along with a sales beat of $3.89 billion.

Since the issue was firmly in the green when it was being covered on the show, only potential resistance in the issue was discussed. As the issue was trading well above its former all-time high ($323.33), the only reference point on the charts was its after-hours high of $327.90.

Traders that were looking for a daily target on the upside were encouraged to wait to see if that level came into play in Wednesday's session. The issue continued to rally but has not reached that level as $327.80 stands as the high for session as of noon.

Starbucks In The Red Despite Q1 Beat

Starbucks Corp (NASDAQ: SBUX) reported an EPS beat of four cents along with a slight revenue miss. However, the company warned of a potential negative impact of coronavirus may have on earnings moving forward and that's not what the Street wanted to hear.

The author of this article noted the poor relative strength the issue had compared to the overall market during Tuesday's rebound. Whereas many issues revisited their closing prices from last Friday (for Starbucks, it was $92.03), it did not even come close as the closet it came was on Monday, when it peaked at $89.45 and ended Tuesday's session at $88.60.

In view of the poor relative strength coupled with the "uncertainty" of the impact of the virus, investors were alerted to more potential downside in the issue. After a lower open, it attempted to rally but found resistance just ahead of Tuesday's close ($88.60), only reaching $88.41 before resuming its move lower. It declined to $85.60 and returned to the $86 handle.

Mike Olson Reviews Apple's Report

Midway through the show, Mike Olson, Managing Director and Senior Research Analyst at Piper Sandler joined the crew to dissect Apple's report. Also, he provided brief comments on eBay Inc. (NASDAQ: EBAY) and Netflix Inc. (NASDAQ: NFLX) recent reports.

On Thursday's at 8:35 a.m. EST, Barron's columnist Steven Sears will be our guest to give his perspective on the recent volatility in the markets.