Winnebago Industries Oversold After Missing Expectations

Thursday was a relatively slow day in the stock market. Recreational vehicle maker Winnebago Industries (NYSE: WGO) was an exception and lost 13.65% after disappointing investors. The company reported earnings per share of $0.40, $0.03 better than expected but revenue came in 4.5% below expectations and the stock sold off.

Many traders and analysts follow WGO because its performance can offer insights into discretionary consumer spending. In a strong economy, sales of RVs and motor homes increase but sales can suffer when confidence sags, consumers are weighed down by debt or concerned about fuel prices.


The stock ended the day with a PowerRatings of 7.

Traders often like to see several trade signals in a single stock and WGO has at least four potential buy setups. Other indicators, including ConnorsRSI, the 2-period RSI and Bollinger Bands® (%b) confirm the potential buy signal. These indicators can be followed at Trading Markets Analytics with a screen that shows multiple indicators at a glance. With %b at -0.50, WGO is the most oversold stock according to that indicator.


PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 7 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.

In the past, buying stocks with a rating of 7 on a 5% pullback the next day and selling five days later has been profitable 70% of the time. The average winner has gained 3.0%. Other entries and exits also show high winning percentages and large average gains.

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All data is as of the end of day on 12/19/2013.