A few warning signs are coming up for Green Mountain Coffee Roaster ($GMCR).
On the Daily Ichimoku Chart, we can see the following:
1. From the Chikou Span, it suggest that the price pattern is developing a possible head and shoulder. It is incomplete and if it dip below $42.78 , the pattern wil be completed.
2. Looking at the Tenkan sen and Kijun sen, we can see that it is now very close and a bearish cross may form if price dips. Currently, price is still trading above the Tenkan sen and Kijun sen.
3. The leading kumo seems to suggest that the trend is ready to change with a possible ‘kumo twist’. Again, there’s no confirmation.
It seems that the support level of $42.78 from the Chikou Span will be a level to watch.
This is one position that I have been holding close to 1 month.
I first write about it on Apr 4 betting that the bearish move will continue and it will break the $43 support level and a target of $33; adding to my positions as it goes up.
The fortunate part is the Chikou Span resistance manage to hold and GMCR earnings is bad.
At pre-market, it is trading around $29 to $30.
Going forward, this gap down is going to be a huge resistance level for GMCR.
With its patent expiring (or has it expired??) and new competitors from Starbucks and Nestle, what advantage does it really have?
Even if it tries to expand its Channel, it will be up against Nestle which I am sure the distribution channel will be much more establish than theirs.
Starbucks has their outlets to count on and a brand name that more consumers are familiar with.
Going forward, margins will be greatly reduced and may even be crushed.
Unless, they can differentiate with new products, GMCR is history.
Is there a need for competitors to acquire them given that the market is falling apart?
GLD has a sharp fall couple of days back.
Kumo support is around $160; the region which it previously breakout from.
Noticed how the Tenkan sen and Kijun sen is touching each other?
A further drop in GLD will definitely result in a bearish cross.
The support levels that I am looking at is around $160 and $150.