Generac Holdings - GNRC - Daily - Double bottom and winter ahead

Generac (GNRC) is a manufacturer of power generators and tends to have a very cyclical nature as customer demand fluctuates widely around, creating large swings up and down in the shares. The last push down occurred on earnings of 82 cents (roughly 2% for the quarter) and a softened forecast for the next quarter.

The chart now has a double-bottom pattern and is turning up from sharply oversold. GNRC also climbed over the "earnings level' where orders may concentrate and therefore allows for stop loss orders to be placed much closer than without knowing the key level labeled by the green triangle.

Look for upside to 44-46-48-50 over the coming quarter with risk to 41.

The chart shows the last four years of price action for GNRC from November 1 to March 21 and pasted onto this year's November 1. We are currently at the low end of the historical pattern, which is another sign of a soft economy or a sign that we are past the bulge of demand from 100-year storms we have experienced here in the Northeast of the US in the past four years. So, think of GNRC as a "disaster insurance" play for bad weather this winter.

Cheers.

Tim 10:45AM EST 11/14/2014 Thursday