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PreMarket Prep Stock Of The Day: Camping World Holdings

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PreMarket Prep Stock Of The Day: Camping World Holdings

With air travel on the decline due to coronavirus concerns, people are finding alternate ways to vacation. 

One way is to purchase a camper and enjoy the great outdoors.  One company that is prospering from this trend is the PreMarket Prep Stock of the Day, Camping World Holdings (NYSE: CWH).

Slight Underperformer Since October 2016 IPO: Camping World Holdings made its debut on Wall Street in October 2016 at $22.12 and for the first 14 months was a solid performer.  By December 2017, it had rallied to $46.33 and ended the year just off that level at $45.34.

The issue went into an extended decline that did not end until it bottomed in March 2020 at $3.35 and embarked on a monster rally.  

Although it has outperformed the S&P 500 index by a wide margin since March, Camping World's return since the end of October 2016 through now is 41%, while the index has yielded 56%. 

Major Monthly Resistance Ahead Of All-Time-High: When an issue starts a parabolic rally, as this issue did off the March low, it is difficult to determine when the trip will come to an end. 

Investors who dabbled in the issue off its March low may have set their target at the all-time-high of $46.33, which would be logical. 

When it comes to investing, things do not always go as planned. In this instance, the issue peaked ahead of that level at $42.41 in August. 

When drilling down on the monthly charts after the fact, it is obvious why that level marked the top of the rally.

After retreating from its all-time-high in early 2017, Camping World established two consecutive monthly highs after stalling out in January of that year just shy of the all-time high of $46.28. 

In February, it peaked at $43.99 and in March at $41.19.  Interestingly, the August 2020 high came in between those two levels at $42.41.

Camping World's Retreat From August High: Any long-term investors knows that for the most part, stocks do not go straight up or straight down. 

After such a torrid run, Camping World was due for a pullback.  A majority of the damage was done in August, when the issue fell from its peak to $28.98.  

In fact, a bulk of the damage was done on one day, Aug. 6, when it swooned from $42.21 to $32.92 — despite posting a huge second-quarter beat. It was certainly a “sell the news” event for investors.

The retreat continued in October and found support just above its July low ($25.05) reaching $25.60 before turning higher. 

Camping World's Q3 Beat: Investors never know how the Street will react to an earnings report. 

After such a major rally off the March low, the Street may have been looking to sell the issue no matter what numbers they delivered. 

With the issue on a substantial decline heading into the report, the Street has decided to applaud Camping World for its third-quarter beat Monday. 

Before the open, the company announced a third-quarter EPS beat of 62 cents and a sales beat of $169 million. 

After a $2-plus higher open, it had a more than $1 retreat to $27.42, which was just above the top of Friday’s trading range.

Camping World then resumed its move higher.

The stock has fallen back under $30 and was trading 2.99% higher at $27.23 at last check Monday. 

Based on the daily charts, the next two areas of potential resistance come in at its Oct. 21 high ($31.58) and its Oct. 20 high ($32.08).

 

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