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Want Some Volatility In Whirlpool Shares? This Data Point Always Moves The Stock

Whirlpool Corporation (NYSE: WHR), being a consumer stock, is subject to the vagaries of the economic cycle, specifically the spending patterns of consumers.

Strong Monday Gains

Over the last year, the stock has gained 11.33 percent, and in the year-to period, the performance was more muted, with a gain of 3.33 percent. The stock saw some activity on May 16. About 1.38 million shares exchanged hands on the day compared to the average volume of 801,590.

The stock gap opened higher on Monday, opening at $184.03 and up from last Friday's closing price of $183.19. After trading in a range of $183.05 to $188.79, the stock ended the session up 2.53 percent at $187.83. This compares to the average gains of 0.1 percent over the past year and marked the biggest one-day advance since April 24, when it reported its first-quarter results.

WHR Price Chart
WHR Price Chart

Source: YCharts

The Trigger

With the first-quarter earnings past and no other fundamental trigger, Monday's gain could be traced back largely to the release of monthly major appliance factory shipment report by the Association of Home Appliance Manufacturers, or AHAM.

The Report

The AHAM is an industry association that provides the home appliance industry and consumers with a forum for action in public policy, standards and business decisions. AHAM helps manufacturers bring efficient, high-performing home appliances into the homes of consumers in the United States, Canada and around the world.

The Major Home Appliance Factory Shipment Report, which is published by the AHAM, is a monthly print that serves as a leading consumer economic indicator. The report provides subscribers with reliable factory shipment data, including domestic and import unit shipments.

Data for April released on Monday showed that April shipments of six biggest categories of white goods climbed 13.7 percent year-over-year, notably above the 2-percent gain expected by the markets.

Meanwhile, the Commerce Department report releases a monthly report on durable goods orders as well as shipments. The most recent report was released on April 27 and the data pertained to March, which saw a 0.7 percent month-over-month increase in shipments. Whirlpool gained 0.4 percent on April 27.

The Correlation

The AHAM data for January 2017 was released on Feb. 15 and Whirlpool gained 1.3 percent for the session. The February data released late on March 15, triggered a 2.7 percent downward move in Whirlpool's stock on March 16, as the report showed a mere 1.1 percent year-over-year increase in shipments.

Why Investors Should Care?

Given that Whirlpool stock invariably moves in reaction to this monthly data, traders can position themselves to capitalize on the up/down move. Since the reaction to the data could be gone in a few seconds, retail investors can place a limit order, which would mean the order is executed at a price no more than the specified price.

Traders should devise strategies ahead and set up tight risk controls while also providing room for volatility to play out.

This data is not available in the public domain, unlike the government economic data, and comes with a subscription fee. For those who would want to capitalize on the volatility created by the data, tune into Benzinga Pro, which carries much more news and information that can serve a trader well.

Related Links:

AT&T, Boeing, Priceline, Whirlpool: Fast Money Picks For May 1

How To Deal With Small-Cap Volatility

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Image Credit: By Wfords378 (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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