GMCR

Green Mountain Coffee Roasters (GMCR) is nice and oversold medium-term and is turned up strongly short-term. The technical pattern here is simply a violation of the downward regression line from the highest close to the lowest close in the last 3 months. Note the small head-and-shoulders pattern which implies only a small upside move, but beware that a set-back to test that based could be ahead.

The BREAK-OUT, FAKE-OUT move back in August was followed by a BREAK-DOWN, SHAKE-DOWN decline to almost fill the chart gap at the 58 level. It is a nice when gaps fill all the way, but it just doesn't always happen exactly. The massive volume on the gap implies there were a LOT of value buyers of GMCR at the 58 level, so the fact that it got close but didn't touch it alerts me to the idea that there is tremendous valuation support at 58.

I would look for a test of the middle of the trading range that GMCR had before the two moves out of the 82-68 trading range. I highlighted a box of 72-77 as a target range for the end of the year.

Stop loss is 3 average daily trading ranges (11-day average) subtracted from your entry price.

Cheers.

Tim 11:31AM EST, Monday, November 4, 2013