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Aug. 29, 2017, 5:02 a.m. EDT

20 stocks that are setting up short-term trading opportunities

From insurers to refineries, some companies’ share prices are being distorted

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By Nigam Arora


Winnebago
Winnebago’s stock is rising on expectations that those displaced by hurricane Harvey in Texas may seek temporary shelter.

My sympathies go to those who have been hurt or displaced by hurricane Harvey. But even in the middle of this tragedy, the world will go on and, soon, rebuilding will begin. No wonder I am getting an inordinate amount of requests from investors regarding stocks that are affected by the hurricane.

The basic principle

For investors, the basic principle to understand is that everything is temporary. Stocks that fall tend to recover. Stocks that rise tend to give up some of their gains. Hurricanes typically don’t create many situations for investments, but many short-term trading opportunities do arise.

How to trade

Please click here for an annotated chart of insurer Travelers Cos. /zigman2/quotes/206313935/composite TRV +0.63% stock.

Historically, insurance stocks recover after a brief dip. The reason is that insurance companies often succeed in raising rates after storms.

Read: These 15 energy stocks are down more than 3.5% in the wake of Hurricane Harvey

To be consistently successful at a large number of trades over a long period of time, traders must look for good setups and refrain from overtrading.

The chart shows that Travelers stock has fallen, but it doesn’t present a good trading setup at this time. A good setup would be if the relative strength index (RSI) drops below 20 on heavy volume and then tries to recover. Such an occurrence is marked on the chart.

This is the kind of setup that is needed on most hurricane-related stocks to trade on the long side. For trades from the short side, the setup is similar, but look for a reversal of RSI from about 80.

Ask Arora: Nigam Arora answers your questions about investing in stocks, ETFs, bonds, gold and silver, oil and currencies. Have a question? Send it to Nigam Arora.

Here is a list of stocks that may present trading setups over the coming days.

• Insurance stocks such as Progressive /zigman2/quotes/202894679/composite PG +0.72% and XL Group .

• Recreational-vehicle stocks such as Thor /zigman2/quotes/202832948/composite THO +1.41% and Winnebago /zigman2/quotes/210279661/composite WGO -0.89% .

• Engineering and construction firms such as Fluor /zigman2/quotes/203795934/composite FLR -0.99% , Quanta Services /zigman2/quotes/203420082/composite PWR +2.34% , Aecom /zigman2/quotes/204198156/composite ACM -0.05% , MasTec /zigman2/quotes/207965492/composite MTZ +0.43% and Chicago Bridge & Iron

• Refineries such as Valero /zigman2/quotes/200735463/composite VLO +1.07% , Andeavor (formerly Tesoro) , Marathon /zigman2/quotes/209634297/composite MPC +1.62% and Phillips 66 /zigman2/quotes/207448059/composite PSX -0.0093% .

• Building-material stocks such as Beacon Roofing Supply /zigman2/quotes/200347023/composite BECN +0.58% , Eagle Materials /zigman2/quotes/207732987/composite EXP -0.10% , USG and Owens Corning /zigman2/quotes/202113551/composite OC +0.30% .

• Home-improvement stores such as Home Depot /zigman2/quotes/208081807/composite HD +0.49%  and Lowe’s /zigman2/quotes/205563664/composite LOW +0.21% .

Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article or may take positions at any time. All recommended positions are reviewed daily at The Arora Report.

Nigam Arora is an investor, engineer and nuclear physicist by background, has founded two Inc. 500 fastest-growing companies, is the developer of the adaptive ZYX Global Multi Asset Allocation Model and the ZYX Change Method to profit from change in trading and investing. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.

/zigman2/quotes/206313935/composite
US : U.S.: NYSE
$ 141.36
+0.88 +0.63%
Volume: 1.51M
Oct. 18, 2019 6:30p
P/E Ratio
14.09
Dividend Yield
2.32%
Market Cap
$36.81 billion
Rev. per Employee
$996,151
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/zigman2/quotes/202894679/composite
US : U.S.: NYSE
$ 117.47
+0.84 +0.72%
Volume: 9.02M
Oct. 18, 2019 6:30p
P/E Ratio
86.38
Dividend Yield
2.54%
Market Cap
$293.98 billion
Rev. per Employee
$727,304
loading...
/zigman2/quotes/202832948/composite
US : U.S.: NYSE
$ 58.22
+0.81 +1.41%
Volume: 625,123
Oct. 18, 2019 6:30p
P/E Ratio
24.05
Dividend Yield
2.75%
Market Cap
$3.21 billion
Rev. per Employee
$409,842
loading...
/zigman2/quotes/210279661/composite
US : U.S.: NYSE
$ 41.30
-0.37 -0.89%
Volume: 310,344
Oct. 18, 2019 6:30p
P/E Ratio
11.94
Dividend Yield
1.07%
Market Cap
$1.31 billion
Rev. per Employee
$430,806
loading...
/zigman2/quotes/203795934/composite
US : U.S.: NYSE
$ 19.06
-0.19 -0.99%
Volume: 1.77M
Oct. 18, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
4.41%
Market Cap
$2.67 billion
Rev. per Employee
$359,268
loading...
/zigman2/quotes/203420082/composite
US : U.S.: NYSE
$ 40.22
+0.92 +2.34%
Volume: 2.19M
Oct. 18, 2019 6:30p
P/E Ratio
18.32
Dividend Yield
0.40%
Market Cap
$5.72 billion
Rev. per Employee
$284,985
loading...
/zigman2/quotes/204198156/composite
US : U.S.: NYSE
$ 41.06
-0.02 -0.05%
Volume: 1.43M
Oct. 18, 2019 6:30p
P/E Ratio
22.11
Dividend Yield
N/A
Market Cap
$6.48 billion
Rev. per Employee
$233,128
loading...
/zigman2/quotes/207965492/composite
US : U.S.: NYSE
$ 67.85
+0.29 +0.43%
Volume: 613,991
Oct. 18, 2019 6:30p
P/E Ratio
16.61
Dividend Yield
N/A
Market Cap
$5.18 billion
Rev. per Employee
$363,654
loading...
/zigman2/quotes/200735463/composite
US : U.S.: NYSE
$ 91.06
+0.96 +1.07%
Volume: 3.80M
Oct. 18, 2019 6:30p
P/E Ratio
15.00
Dividend Yield
3.95%
Market Cap
$37.74 billion
Rev. per Employee
$11.41M
loading...
/zigman2/quotes/209634297/composite
US : U.S.: NYSE
$ 65.14
+1.04 +1.62%
Volume: 12.75M
Oct. 18, 2019 6:30p
P/E Ratio
14.11
Dividend Yield
3.25%
Market Cap
$42.88 billion
Rev. per Employee
$1.59M
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/zigman2/quotes/207448059/composite
US : U.S.: NYSE
$ 107.20
-0.01 -0.0093%
Volume: 3.02M
Oct. 18, 2019 6:30p
P/E Ratio
9.27
Dividend Yield
3.36%
Market Cap
$48.13 billion
Rev. per Employee
$7.84M
loading...
/zigman2/quotes/200347023/composite
US : U.S.: Nasdaq
$ 32.89
+0.19 +0.58%
Volume: 300,323
Oct. 18, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.25 billion
Rev. per Employee
$839,876
loading...
/zigman2/quotes/207732987/composite
US : U.S.: NYSE
$ 92.42
-0.09 -0.10%
Volume: 265,153
Oct. 18, 2019 6:30p
P/E Ratio
104.49
Dividend Yield
0.43%
Market Cap
$3.88 billion
Rev. per Employee
$633,297
loading...
/zigman2/quotes/202113551/composite
US : U.S.: NYSE
$ 62.95
+0.19 +0.30%
Volume: 1.10M
Oct. 18, 2019 6:30p
P/E Ratio
13.51
Dividend Yield
1.40%
Market Cap
$6.85 billion
Rev. per Employee
$352,850
loading...
/zigman2/quotes/208081807/composite
US : U.S.: NYSE
$ 237.93
+1.16 +0.49%
Volume: 3.66M
Oct. 18, 2019 6:30p
P/E Ratio
23.70
Dividend Yield
2.29%
Market Cap
$260.57 billion
Rev. per Employee
$261,993
loading...
/zigman2/quotes/205563664/composite
US : U.S.: NYSE
$ 112.84
+0.24 +0.21%
Volume: 3.71M
Oct. 18, 2019 6:30p
P/E Ratio
35.24
Dividend Yield
1.95%
Market Cap
$87.09 billion
Rev. per Employee
$230,029
loading...

Nigam Arora is an engineer, nuclear physicist, author, and entrepreneur and the founder of two Inc. 500 fastest growing companies. He is also the developer of the ZYX Change Method to profit from change by investing. The premise is that most money is made by predicting change before the crowd. Arora is the chief investment officer at The Arora Report and the editor of four newsletters that track the ZYX Change Method. Nigam can be reached at Nigam@TheAroraReport.com

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