Monday mornings tend to attract dip-buyers but so far they aren't doing much this morning. The indices gapped down and are staying there so far on breadth of about 1400 gainers to 5800 decliners. There are more new 12-month lows than highs right now and only a handful of stocks up more than 10% on the day.
Headlines about the growth in Covid names are helping to drive some of the standard plays such as Amazon (AMZN) and Zoom Video (ZM) , but buyers are starting to step up in the FATMAAN names in front of upcoming earnings.
Overall the action is quite mild given the drop in the indices. There is no rush for the exits and there are still dip buyers out there providing support although they are not too aggressive right now.
If we did not have so many earnings reports coming this week I'd expect to see more correlated selling but the focus is still on stock picking and that is helping to prevent broader selling. The action is not index driven and that is positive.
A couple of names I'm adding to this morning are Pacific Ethanol (PEIX) which produces medical-grade alcohol that is used in sanitizers. The company went from the verge of bankruptcy as the ethanol business fell with gasoline demand but has transitioned its 100-year-old business to benefit from the Covid crisis.
Another name I'm adding to this morning was last week's "Stock of the Week" Axovant Gene Therapies (AXGT) which is updating its progress on October 30.
This morning Bayer (BAYZF) announced a deal to pay $2 billion upfront and an additional $2 billion in milestones for a gene therapy program also involved in Parkinson's. AXGT with a market cap of just about $150 million looks like peanuts compared to that valuation and is seeing some additional interest this morning
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