Below is a brief recap on each of the top-volume, news-driven movers in Monday's after hours, taking a look at specific stocks' after hours movement and how that trade may offer insight into potential floor supports, ceilings and trading ranges that could develop in Tuesday's pre-market and early regular session.
MGM Resorts (MGM) declined 3.9% to 11.09 in Monday's after hours trading after reporting a swing to a Q2 profit on higher revenue. MGM cratered to an early after hours low of 10.68 before spiking back to 11.80. It settled in a mostly negative range of 11.65 to 11. After hours indications would suggest MGM records a potential pre-market open Monday at 11.50 to 11.30. MGM has recorded an earnings-driven after hours decline in six of the last 11 quarters tracked in our database. Also, 66.7% of the time (four out of six times) the stock reversed in the opposite direction by the close of the next day's regular session compared to the extended hours "effective close." When it reversed, the price closed in the opposite direction on average by 4.6% (in four events) from the effective close. The reversal trend in place on downside evening moves, combined with some decent buy support that moved into the MGM Monday night in the low- to mid-11s, would have us looking at a potential long play on the shares. Early longs may want to target prospective entry points between 11.00 and 11.30, a range where a near-term floor support could develop and possibly see bumps back into the mid- to higher-11s.
Take-Two Interactive (TTWO) declined 5.5% to 10.50 in Monday's evening trading after missing Q1 estimates and guiding for Q2 results below expectations. TTWO was released from an after hours trading halt and dropped straight to its session low of 10.26. Buyers pushed in moderate upside support off the low, boosting TTWO up near 10.85 to 10.60, levels where it stayed through the bulk of its evening trade. A pre-market open Tuesday looks to have potential surrounding the 10.60 mark. TTWO has recorded an earnings-driven after-hours decline in three of the last 10 quarters tracked in our database. Also, 66.7% of the time (two out of three times) the stock reversed in the opposite direction by the close of the next day's regular session compared to the extended hours effective close. When it reversed, the price closed in the opposite direction on average by 5.9% (in two events) from the effective close. The limited reversal data on downside moves doesn't have us leaning hard on a potential short play in TTWO shares Tuesday morning. In fact, more risk tolerant longs may want to watch the 10.30 to 10.60 area as a possible near-term floor support that could open the door for pops back into the higher 10s.
Limelight Networks (LLNW) declined 20.3% to 2.63 in Monday's after hours trading after missing Q2 estimates. LLNW saw a steady decline through the first-half of after hours trading, dropping from 3.20 to a session low of 2.30. It held between 2.70 and 2.40 through the late first-half and second-half of night play. A pre-market open Tuesday may have potential in the 2.70 to 2.50 area. LLNW has recorded an earnings-driven after hours decline in thee of the last five quarters tracked in our database. Also, 100.0% of the time (three out of three times) the stock followed-through in the same direction by the close of the next day's regular session compared to the extended hours effective close. When it followed-through, the price closed further in the same direction on average by 5.0% (in three events) from the effective close. We're inclined to follow the downside widening pattern in place on LLNW and peg a short on the shares, especially considering some of the aggressive selling seen in the shares off the 3.20 to 2.80 range - levels shorts may want to eye as a potential top that could see negative drift back into the mid-2s.