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Struggling Below 50 Day Average 4 Weeks With Lack Of Volume Behind Gains
Thursday, September 10, 2009   CANSLIM.net
 

Green Mountain Coffee Roasters (GMCR +$0.20 or +0.34% to $59.62) has been hovering in a tight trading range for the past 4 weeks under its 50-day moving average (DMA) line with volume drying up. As previously noted, "a violation of its prior chart low ($54.32 on 8/18/09) would complete a bearish 'head-and-shoulders' pattern and may trigger more worrisome technical sell signals." It last appearance in this FSU section on 8/26/09 (read here) came under the headline, "Coffee Stock Cooling Off Since Share Offering Recently Completed", which described some current concerns that have arisen since GMCR traded up more than +168% since appearing with an annotated graph under the headline "It May Soon Be Time To Go Green" when featured in the January 2009 CANSLIM.net News (read here).

After a stock slumps under its 50 DMA line its outlook becomes increasingly questionable the longer it stays trading under its 50 DMA line. That important short-term average can be a source of near-term technical resistance, so for its outlook to improve, GMCR now needs to produce gains to get back above it.  Meanwhile, the next support is at prior chart lows in the $54-53 area, where violations would trigger additional sell signals and raise more serious concerns. As previously noted, "Its gap down and considerable loss on 8/17/09 on heavy volume triggered technical sell signals."

About : Kenneth J. Gruneisen - Passed the CAN SLIMĀ® Master's Exam
Kenneth J. Gruneisen started out as a licensed stockbroker in August 1987, a couple of months prior to the historic stock market crash that took the Dow Jones Industrial Average down -22.6% in a single day. He has published daily fact-based fundamental and technical analysis on high-ranked stocks online for two decades. Through FACTBASEDINVESTING.COM, Kenneth provides educational articles, news, market commentary, and other information regarding proven investment systems that work in good times and bad.


Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.
You can contact Kenneth J. Gruneisen - Passed the CAN SLIMĀ® Master's Exam at kengruneisen@gmail.com

 
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