Quicksilver Inc. (NYSE:ZQK) - Bullish/Long
It looks like Quicksilver may have finally shrugged off its problems for good.... the company as well as the stock.
Despite lots of volatility, investors continue to show optimism for the surf apparel manufacturer in the form of higher highs and higher lows since November of last year. That's roughly when the company managed to convince the market and itself that the losses in 2007 and 2008 weren't a permanent condition. As a result, the buyers have been flowing back in.
Given that ZQK lost more than 80% of its 2007 high value, there's a lot of room for upside here. But, it will take time to realize the full potential; don't be surprised if Quicksilver turns into a long-term play for us. (The forward-looking 12 month P/E here is 11.7, if that tells you anything about the timeframe we're considering.)
Nevertheless, it's the recent push off a support line and slowly-increasing buying volume telling us now's the time to get in - ahead of most of the crowd.
By the way, COMS and DSCO were both considered as today's possible buys, but ZQK won the day. All three are worthy though.
Side note: We visually and mechanically scan lots of stocks for potential buy recommendations. Though we didn't pick one for today's bullish idea, you may want to know that REITS easily topped all of our sorts and scans in terms of sheer volume. When the whole group is sending the same message, there may be something to it. We'll explore the industry's tickers in a future edition, but it may be worth a little DD on your own in the meantime.
Thor Industries Inc. (NYSE:THO) - Bearish/Short
Betting against the recreational auto industry is a pretty aggressive stance, considering the way the market's fallen in love with these stocks with just the mere prospect of green shoots. However, with the stock's price more than doubling since March, odds are low that Thor will actually be able to meet those lofty expectations.
The big clue that THO peaked and reversed in early August is the August 5th bar... the stock hit a new multi-week high that day, but the volume peak actually came the day before. Since then, it's been nothing but downhill.
There's a bastion of support around $25.50, and if it breaks, THO has nowhere to land for a while. Since the selling volume has been relatively significant though, we're going to go ahead and preemptively take on a short position.
Like we said, this is a high-risk, high-reward idea, and based on the assumption that Thor will continue to fall short of earnings and other expectations.