So yesterday morning, I decided to buy some shares and call contracts on Beacon Roofing Supply, Inc. (BECN), as a pure hurricane play. As they say on their web site,:
Now what happens when the hurricane winds blow? Right! Roof shingles go flying off of homes all across the Southeast.
But then an interesting thing happened. I checked the charts, and what do you know–BECN is down some 30% off it’s recent highs! Can you say OVERSOLD AND HURRICANE PLAY?!
Holy tornado, Batman!
So between the hurricane and the oversold conditions, the time was right for a serious pickup of some BECN shares. And it doesn’t hurt that we now have RSI and Stochastic buy signals (see chart below):
Well, so much for the best laid plans of Mice and Men…..the hurricane moved out to sea, sparing those of us in Florida from another bout with Mother Nature. But landfall may still happen in the Carolinas or Virginia, as I write this blog.
And oh by the way, after I bought my shares, BECN still went up a whole lot, and I today I sold my shares and contracts. I made 16% on the option contracts, and over 3% on the regular shares since yesterday.
Done deal? Not on your life. I’m simply waiting for a retracement, and may get back in. Even if this hurricane hits nobody, it’s only August 23, and we are just getting into the meat of hurricane season. With BECN this oversold and the chance for a few more hurricanes to come our way, BECN remains a great intermediate play as well.
BECN is the Babe Roof of the hurricane stock plays, and this one is a sure home run!
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