We review the premarket report and price action analysis.
What is premarket trading?
The premarket movers is a report of stocks trading in the premarket hours. Generally stocks can start trading at 4 am eastern and continue to trade up to the opening bell at 9:30 am eastern. After 9:30 am eastern, the regular trading hours begins. Stocks that trade in the premarket do not have the same liquidity and rules protecting investors as the regular hour sessions and the trading is considered riskier. The premarket trading prices can be a good indication where the stock may open for trading during regular hours.
When does the premarket report start to populate?
Stocks can start to trade as early as 4 am eastern. However, during this time the markets are very thin and volume is low. Usually, the morning company press releases and new announcements start to get distributed after 7 am eastern and you may start to see more volume and price activity in reaction. We start to populate the premarket report after 7 am eastern because this is when the news cycle begins and there is more liquidity and activity.
How to screen for premarket movers?
You can use different filters to narrow down your results. The report has 3 tables that are divided into the most active stocks, biggest percentage gainers and biggest percentage decliners. You can get an idea of the breadth of the market by comparing the number of stocks that made the percentage gainers list vs the percentage decliners. This will allow you to to see if the market is leaning more towards a bullish or bearish opening. Then you can continue to screen out the report based on selecting filters.
What filters can I use to screen for premarket stocks?
In My Watchlist: This filters allows you to filter the report by a specific watchlist name that you have created or you can select to show "All My Watchlists". The All My Watchlist will screen for any symbol that is included in any of your watchlists. The idea is that you can quickly see if any stock that you follow is moving in the premarket.
In ETF: This filter allows you to select an "ETF" such as the SPY or QQQ. By selecting this filter, you will get any stock that is a holding of that particular ETF and is on the premarket list. For example, if you wanted to screen for S&P500 stocks, you can select SPY and the holdings for the SPY ETF will be filtered. The SPY is an ETF that tracks the S&P 500 index.
Sector: This filter will allow you to screen by sector
Industry: This will allow you to filter out stocks by the industry
Market Cap: The market cap filter will narrow down the report to stocks by the market cap that you select. If you want to see what is happening in the higher market cap stocks, this is a good filter to quickly narrow down the list.
Premarket Volume: You can use the premarket volume filter to reduce the list of stocks that traded a minimum amount of shares in the premarket. You can use this filter if you wanted to only see stocks that traded above a certain quantity of shares in the premarket hours.
ETF or Common: You can use the filter if you only wanted to view the ETFs or if you only wanted to view common stocks.
Has News or Earnings: Sometimes stocks are moving in the premarket hours because the prices are reacting to a recent news or earnings announcement. You can use this filter to just focus on the premarket movers that we detected a recent news or earnings release. Hover over the indicator in the report to get more details.
Price > Prev High or Price < Prev Low: Sometimes traders will use technical indicators to compare the premarket movers. This filter will let you select stocks that are either trading above the previous day high price or below the previous day lows price.
Price > 52 week high, Price < 52 wk low: If you wanted to compare the premarket price vs the 52 week high or low, you can use this filter. For example, you can screen for stocks that are trading in the premarket at a price above its 52 week high or below its 52 week low.
How can I analyze the behavior of historical stock premarket movers?
There are 2 ways you can analyze the historical premarket movers.
1. You can click on the specific stock in the premarket report and it will bring up an analysis page. You can view how the stock performed following a morning gap to the upside or 2 the downside. This will give you a historical return distribution following a gap move. You will have the statistical analysis and average moves from the open to the high of the day. The average moves from the open to the low of the day. The days drift from the open to the close of the day including average returns and frequency of up vs down moves.
2. If you scroll down to the bottom table, you will see a list of stocks with premarket movers in the last 20 days. You can see how these stocks performed after the opening as a whole or split them into groups using filters such as industry, market cap, movers with news or earnings, movers based on minimal percentage change, etc.. This will give you insights how stocks that had recent gap moves performed on average the first half hour after the opening and the days drift from the opening price to the close price.
Where can I find the premarket movers report?
You can go the premarket movers report from the main menu under stocks https://marketchameleon.com/Reports/PremarketTrading