Generac Holdings (GNRC)

Jul 7, 2022Trade Ideas

With hurricane season and the potential for more heatwaves in the U.S., keep an eye on oversold shares of Generac Holdings (GNRC).

The oversold generator stock could benefit as “demand for uninterrupted and reliable power supply has increased significantly, which has led to the sale of generators. Therefore, generators are considered a robust medium in providing power backup in industrial buildings, data centers, and at times in emergencies,” as noted by Astute Analytica.

In addition, as noted by Northland analyst Donovan Schafer said Spruce Point’s short report on Generac issued on June 22 “pedantically focuses on immaterial issues” and was “deeply-flawed.” The analyst, who doesn’t expect Generac to issue a response to the short report given his view that “frankly, it’s a bit hard to take seriously,” sees the report as presenting an opportunity to buy. He maintains an Outperform rating and $370 price target on Generac shares.

At the moment, GNRC is oversold at double bottom support dating back to May. It’s also starting to pivot from over-extensions on RSI, MACD, and Williams’ %R. From a current price of $217.18, we’d like to see the stock challenge $300 again, near-term.

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