Friday, May 9, 2014

GNRC: Unraveling of the Sandy Premium

I've been short GNRC (avg. $57.29)  on the premise that the generator company's earnings are temporarily inflated due to the horrible weather of the last year including Hurricane Sandy.  This was an IBD top momentum stock and had not been easy to hold 1st qtr.  Although it didn't push much higher it stayed strong... until first quarter earnings, which missed revenue. GNRC has pretty much acknowledged my theory to be correct and the stock falls.  I believe that there is more down side to go.  That being said, the gap is now closed and the 200MA might provide support. I may consider closing a portion of the position.

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