Stock of the day for pre-market preparation: Macy’s – Macy’s Inc (M)
Benzinga’s PreMarket Prep airs every morning from 8 a.m. to 9 a.m. ET. During this fast-paced and highly informative hour, traders and investors tune in to get the top news for the day, the catalysts behind these moves, and the corresponding price action for the upcoming session.
Each day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick as well as producer Spencer Israel.
While trading ranges can be boring, they can offer future trading opportunities that can prove to be profitable.
Wednesday, the 14-day trading range in Macy’s Inc. (NYSE: M) resolved higher, making it the pre-market prep stock of the day.
Macy’s Pre-Earn Pops: A day before Macy’s first quarter earnings report in May, Street decided to take a hard look – high time.
Other than a positive mention on CNBC, there was no major catalyst for Macy’s to have its best one-day performance since March 15.
On Friday May 14, Macy’s had a mysterious rally from $ 15.86 to $ 18.08 on nearly double the volume from the previous day.
Macy’s Q1 rhythm: Ahead of the opening on Tuesday, May 18, the company reported quarterly earnings of 39 cents per share, beating the analysts’ consensus estimate of a loss of 41 cents per share by 195.12%.
This is an increase of 119.21% from losses of $ 2.03 per share compared to the same period last year. In addition, quarterly sales of $ 4.71 billion were 7.94% higher than analysts’ consensus estimate of $ 4.36 billion.
This is an increase of 55.98% from sales of $ 3.02 billion in the same period last year.
This sparked a further rally from $ 1.08 to $ 19.16, for a two-day return of 21%.
Although the show hit a new high ($ 19.65) on earnings day, it ended the session slightly in the red by 7 cents at $ 19.09.
Consolidation station: Over the next 14 days, Macy’s traded in a well-defined trading range of $ 17.85 to $ 19.05, with a large majority of volume in the $ 19 grip.
Most likely, the big buyers were aiming for the $ 18 level and the big sellers were aiming for $ 19. Active scalpers nibbled between the two.
Macy’s configuration: On Tuesday of this week, Macy’s danced between the two limits of the trading range ($ 18.07- $ 18.90) and settled into the upper end of the range, 4 cents higher at 18.68 $.
As a result, the show would have less distance to travel, based on its average trading ranges, to eliminate institutional sellers stacked at $ 19.
After a higher open on Wednesday, it experienced a brief retreat and found support just below the close at $ 18.61 and resumed its upward movement.
Still, the increase in volume easily absorbed sellers in the $ 19 zone.
In addition, traders who had leaned on this level to sell and who had been profitable time and time again were forced to hedge. Plus, card recognition algorithms rushed the breakout and added fuel to the fire.
Macy’s is moving forward: At this point, the problem broke through the $ 20 level, hitting $ 20.38, but fell back into the $ 19 grip. If the old resistance becomes new support, $ 19 can be used as support if going down.
For an upward follow-up, the issue must first clear the current high and challenge the pair of highs in the $ 21 area from mid-March. Interestingly, these highs were the highest level for the problem since August 2019.
Macy’s shares were down 2.6% to $ 19.08 when last checked Thursday.