It seems like the signals are aligned for GMCR.
1. We have the Bearish cross from Tenkan sen and Kijun sen.
2. It has break support from Chikou Span at 23.49
3. Price is trading near the thin kumo support at around $21.86
4. Leading kumo suggest possible kumo twist; thus confirming that this rally may head back to the bearish territories.
It seems like $GMCR is going to have a setup for a bearish move.
From the Ichimoku chart, we can identify the following trading signals:
1. Bearish cross from Tenkan sen and Kijun sen; reflective of the price dropped from $32 to $24
2. Thin kumo support below the current price level suggests that the support is not strong
3. Steep kumo from the past shows the huge change in business trends, a reminder of the changes its business challenges.
And here’s a reminder :
Why Einhorn shorted GMCR?
- Low operating cash flow
- Negative fre cash flow (and getting more negative)
- CAPEX was high and rising
- Valuations sky high
- EPS was slowing and return on invested capital was relatively low
- Increase competition (<< this is a killer, price pressure on product pricing)
- Loss of exclusivity patents (where’s the moat?)
LULU has gapped down has gapped down back in June 6 from $70 to $65 range.
It has since went lower and hit support at around $54 before rebounding.
There is a pretty good setup now.
With LULU trading at around $64.35, it is hitting the resistance from the gap down as well as the kumo on the Ichimoku chart.