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
- IncreaseÂ competitionÂ (<< this is a killer, price pressure on product pricing)
- Loss of exclusivity patents (where’s the moat?)