Are you still trading GMCR? (August 04, 2012)
I’m Dan Fitzpatrick at StockMarketMentor.com on Saturday, August 4th. In this video I want to just take a quick look at Green Mountain Coffee Roasters ( $GMCR Green Mountain Coffee Roasters Inc. ); they announced earnings on the first, which was this day after the market, meaning this day was the post earnings trade, big move higher. Right? What happened then on Friday? They announce earnings on Wednesday, stock trades up on Thursday, and now the stock is pulled back so there was no follow-through. Now what do we see? Well, now we see the 50 day moving average remaining very relevant, so I’ll just say it, I think this is a stock that you can still short and I don’t think I’m the only guy that thinks that, but here’s what you want to do; if you are interested in shorting this stock you have to be concerned with this, with the follow through from this earnings move; I don’t think that’s going to happen but I can’t say that with too much confidence simply because I don’t want to jinx the trade. As soon as you say there’s no way this stocks going to move higher the stock is going to say, “Well, we’ll just see about that won’t we?” So I don’t want to say that, but I will say this, you look at Thursday’s intraday high, that’s your line in the sand, that’s the one where you say, “Okay, if the bulls push Green Mountain Coffee Roasters ( $GMCR Green Mountain Coffee Roasters Inc. ) above Thursday’s intraday high, then I am wrong to be short this stock, so I want to get out of this thing right away and you’re going to cover; that means that if you shorted say on Friday’s close this is the amount that you’re risking and on a percentage basis it’s not an insignificant amount, it’s not an insignificant amount it all. So what do you do? You start with a small position, you start with a smaller short position than you normally would and then as the stock starts rewarding you, and it can be in five minutes or five days, then you can start adding to that position. On the other hand, if the stock rallies up here you’re kind of glad you only have a small position because then you’re watching this like a hawk and a lot of times what we’ll see is this kind of action and then we get the move down. That’s how I would suggest trading Green Mountain ( $GMCR Green Mountain Coffee Roasters Inc. ), just keep your buy stop right up above Thursday’s intraday high and I think you’re going to be fine. Okay members, I got a couple videos for you in the Weekend Update so get over there now. Free Chart