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.
The PreMarket Prep show's main goals are to provide balanced information on the markets and provide education. In every broadcast, investors can learn new things about the markets that aren't discussed on other broadcasts.
On Friday’s show, the hosts discussed the importance of order flow and resting orders that may impact price action at the open — and sometimes longer.
When it comes to a “thick” market (high volume and or low-priced), observing the “open book” for orders on the NYSE can provide valuable insight into the opening print.
With that being said, Ford Motor Company (NYSE:F) is the PreMarket Prep Stock Of The Day.
The NYSE 'Open Book': Interactive Brokers describes it as “a market data subscription offered by the NYSE which provides a real-time view of the exchange's Limit Order book for all NYSE-traded securities and which lets traders see aggregated limit-order volume at every bid and offer price.”
As a result, large institutional orders can be identified by investors that may be entered on “good till canceled” status until they are fully executed.
In an issue like Ford, the orders are often congregate at whole numbers.
Since the issue has only traded above $12 once this year, reaching $12.15 on Jan. 21, which matched its June 2018 high, some investors did not want to miss a second chance at selling at that price.
The Scenario: Ford, which has been in favor with Wall Street since bottoming at $3.96 in March, released fourth-quarter earnings after the close on Thursday.
What the report revealed does not really matter for the point of this article, but the price action does. Just ahead of the opening bell Friday, the premarket high was $11.93, just under the key psychological level of $12.
PreMarket Prep's Take: Co-host Dennis Dick, who subscribes to the NYSE Book, took a peak to see what was lurking at the $12 area.
“Oh my lord, this thing is littered with huge sell orders,” he said of Ford.
As the issue was trading at the $11.50 level, therre were millions of shares for sale up 30-40 cents, Dick said.
"I own it in my long-term portfolio, but I am not buying it for a daytrade.”
The full discussion on the issue from Friday’s show can be found here:
Ford Price Action During The Regular Session: Ford did open higher, rallying by another dime and peaking in the area discussed on the show at $11.90 before reversing course.
The ensuing decline found support just under Thursday’s close ($11.37) at $11.30.
The stock was up 0.97% at $11.49 at last check.
Disclaimer: Co-hosts Dennis Dick, Joel Elconin and producer Spencer Israel all hold long positions in Ford.
Photo courtesy of Ford.