Posted on June 18, 2020
We’re at a strange crossroads in the market today, with the high-fliers that move the indexes now soaring with blood-oxygen levels of a bar-headed goose – and the rest of the market flat to lower.
And the question is…
How does the next move unfold?
Are the laggards destined to play catch-up while the leaders hover motionless?
Or will we see a dive among the ornithological set that rips at the broader market like a Griffon vulture?
The choice is actually a false one, because odds are good that we can play both sides of the question in a single trade.
That is, we can move on the presumption that either way, the gap between the two critters will close.
At this point, the academics become simpler – we have to select two securities for the pairing, one overpriced birdie and a second, dogged and reliable donkey that can withstand a broader market downdraft.
And that brings us to today’s headline.
The Norse God in the equation is none other than Thor Industries (NYSE:THO), makers of recreational vehicles for the financially triumphant, whose stock has climbed a miraculous 300% in just three months.
Amazing what a bat-flu can do for oversize jalopy sales.
Before we get to the chart, though, consider some numbers.
On June 9, the company handily beat analyst estimates – but the shares have gone nowhere since.
Because expectations were ground so low over the last three months that it became a slam-dunk.
The company’s real numbers indicated a quarter-over-quarter erosion in sales and earnings of 32.9% and 26.7% respectively.
In short, nothing to get heated over.
Here’s the chart –
Maximum gain on the trade is $10.60.
Maximum loss – with proper stops in place – will be limited to the level of your choosing.
Many happy returns,