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With new storms brewing, it’s time to jump into hurricane prep stocks – especially oversold ones, like Generac Holdings (GNRC).
At the moment, there’s a potential hurricane forming in the Gulf. According to Chron.com, “The National Hurricane Center announced Monday morning that the chances of "tropical cyclone formation" have tripled, up to 90 percent from 30 percent as of Friday.”
"Heavy rainfall from Potential Tropical Cyclone Nine is expected across South Texas on Tuesday and Wednesday,” they added, noting that "coastal flooding is possible along the south Texas coast tonight through Tuesday morning."
Of course, if you’re in its way, be safe.
Generac Holdings (GNRC)
For those looking for an investment idea with the storm, look to generator stocks. For example, oversold shares of Generac Holdings (GNRC). Not only is the stock starting to pivot higher, it could also benefit from surging demand for generators in preparation for potential power outages. GNRC last traded at $116.18. We’d like to see it refill its bearish gap around $155.
There are also the home improvement stocks.
Home Depot (HD) and Lowe’s (LOW) historically stand to benefit from increased sales of plywood and other home improvement goods.
This is a subject that is often written and talked about, but is generally the first thing discarded after trading begins. If you only get one clear message from reading about trading, I hope this article is it. There really is nothing more important. Money management should be your top priority, even above your trading style. It doesn’t matter if your trading program is correct 9 out of 10 times if you let that one time wipe you out.
I've seen this happen with several different trading techniques, but most often to those who sell naked options, whether with strangles (also cleverly called neutrals by some), straddles, or just selling one side of the market. Selling options naked is just like playing Russian roulette; one bad turn will kill you. I never "roll" a naked option up or down, those that do are usually either delaying disaster or courting an even greater catastrophe down the road. Yes, the strategy can work once in a while, but you must know when to say "when" and get out of the trade.
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