Pre-Market Update – Gapping Higher (C, AAPL, DELL, MON, FDX)

Published on Thursday, 01 July 2010 07:49 Written by Christopher Lynn

 New York, Jul 1^st (TradersHuddle.com) – US markets futures are signaling that the selling pressure will continue on this new month after the markets completed their worst quarterly performance since 2008. S&P 500 futures are indicating that the broad market index will open right at 1,025 which is well below the 1,040 area that technicians had defined as a key area to hold to avoid more selling pressure.

Despite the overall market weakness there are some stocks that are topping the tape, the first one on the list is Citigroup (NYSE:C) which in early pre-market is trading 0.8% higher than yesterday. Citigroup was able to finish the session yesterday fractionally higher without breaking the low from Tuesday big sell-off. According to traders Citigroup has been able to hold a macro uptrend that comes from the lows defined on its stock offering, therefore it is offering heavy support and buyers at $3.50 ~ $3.60 area. This might be one of the reasons that the stock has outperformed on a relative basis during the last two days.

Apple (NASDAQ:AAPL) is also trading higher this morning by 0.77% from its close yesterday. Apple broke down below the 50 day moving average last Tuesday and that just generated more selling to materialize yesterday where it tested and had a small technical bounce from the $250 area. Apple has been on corrective mode for the past few weeks, and has been unable to react to positive news like being able to sell 1.7 million new iPhones.

Dell (NASDAQ:DELL) is topping the tape this morning as it is trading higher by more than 1.5% after the struggling computer maker was upgraded to Buy at UBS, although its lowering its target on the stock. UBS thinks that Dell will benefit from corporate PC refresh cycle. UBS also cites valuation as attractive at 0.2x forward EV/sales.

Monsanto (NYSE:MON) is also trading against conventional wisdom as it is trading higher exhibiting relative strength despite the weak conditions and most importantly after the stock that reported earnings yesterday that fell short of expectations showing a decrease of 45% on their quarterly profits. Today in pre-market the stock is trading 0.6% above yesterday’s close and 52 week low.

FedEX (NYSE:FDX) is another notable stock trading higher in pre-market price action by a fractional 0.2%, also exhibiting relative strength on a very weak market. No particular news on the stock today, just some investors stepping in trying to find a bottom, after the tremendous sell-off in the stock. FedEX has seen its shares decline close to 30% from their April high.