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.
How often does it occur that a company releases news and an issue reacts — then basically releases the same news again, and the issue has the same price reaction?
That's the case with Foot Locker (NYSE:FL), Friday's PreMarket Prep Stock of the Day.
Foot Locker News, Price Action Aug. 10-11: Before the open on Aug. 10, Foot Locker issued second-quarter guidance above analyst estimates and reported an 18% increase in same-store sales. The issue added over $2 that day, climbing from $27.48 to $29.43.
The following day, Morgan Stanley and Citigroup kept the rally going when they both raised their price target to $30.
That instigated another gain for the issue, as it peaked intraday at $31.18 and ended the session at $30.30 on Aug. 11.
Sell The News: There was no more follow-through on the two-day rally. The unsteady issue grinded its way lower and went to nearly the same level it traded at before Foot Locker raised its guidance.
On the day preceding the double dose of good news, the issue bottomed Aug. 7 at $26.58.
On Thursday of this week, the issue had surrendered all of its previous gains on the news and bottomed in Thursday's session at $26.90, settling just off that level at $27.19.
Algos Trade Off Old Foot Locker News: Before the open Friday, the company announced a second-quarter EPS sales beat of 14 cents along with a sales beat of $800 million. Second-quarter comparable same-store sales increased 18.6% instead of 18%.
The only new announcement was that the company reinstated its dividend program, declaring a dividend of 15 cents per share.
Similar Foot Locker Price Action: After a slight dip in off the print, the issue blasted to $29.77 Friday and immediately pulled back under $29.
It traded actively between 8 a.m. and 9 a.m. ET. PreMarket Prep co-host Dennis Dick said the issue had been leaking since it peaked at $29.77, and the author of this article agreed that it was shaping up as another “sell the news” scenario.
Foot Locker's Price Action During The Regular Session: After a higher open, the issue found resistance just above a pair of highs from Aug. 14 ($29.12) and Aug. 15 ($29), reaching $29.30 before sharply reversing course.
As of 10:45 a.m. the ensuing decline has breached the top of Thursday’s range ($27.79), falling to $27.46. As of press time, it is struggling to reclaim the $28 handle.
The full discussion on the issue from today’s show can be found here:
Photo by Dwight Burdette via Wikimedia.