Consumer Goods

$GMCR . Can it stay above the kumo?

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?)

Prologis ($PLD) : Potential Stock To Short

Got this from Invest2Success blog.

Key Points:

1. ProLogis secondary offering 30 million common share

2. Proceeds will be used to repay debt from a bridge facility. Do note the word ‘bridge’. To my knowledge, these are short term loans to allow Prologis to buy time to raise more funds. I maybe wrong since I trade mostly based on the chart.

3. Growth is expected to slow down in areas where its assets are located.

Note: The chart has not exhibit any confirmation. I will be watching for a LONG PUT position.


S&P500 ($SPX): Market correction. Watch for it.

S&P 500 fell more than 1% yesterday before it manage to recover to a 0.7% loss.

Despite ADP reporting that there’s 179,000 jobs increased in April, it seems that the market has its own reservation of future growth.

On the Ichimoku Daily Chart for $SPX, we can see that yesterday closing has dipped below the Tenkan sen. Next support is near the Kijun sen at around 1332.

At this moment, there is no confirmation of a bearish move. However, the kumo support right below is thin. A drop below it will give confirmation of a bearish move.