GMCR- SHORT BIAS AS IT COULD SLIDE IT'S WAY DOWN INTO THE VALLEYPurely Technical Outlook:
Based on the price data going back to 1994 if that was the IPO of the company, then it has rising to 2014 high in clear 5 wave impulsive move and could now be making a major retracement of the entire rise.
Not particularly sure of the fundamental of the company but its price weakness could be compounded by wider market weakness and it seems to have started the race early by making its top in Nov 2014 where as the market is possibly forming one now.
If correct the then based on EW principle retracement could make it to wave 4 of one lesser degree which brings it into vicinity of 17- 20 area which would be 88.6% retracement of the entire rise. Whilst at the same time if the intermediate support around 55 holds then any bounce back to 90 area form classic bearish H&S.
Summary of Technicals:
1. Completed major 5 impulsive move to form the top in Nov 2014
2. Clear RSI divergence with price between wave 3 high and wave 5 high.
3. Currently in Wave 3 of 3 which is normally very strong aqnd dynamic (see Snapshot of daily time frame below0
4. Normal retracement would be in the vicinity of wave 4 low of one lesser degree in the area of $17 -$20
5. That would line up with 88.6% retracement which would not be uncommon for many high flying stock.
6. This decline from Nov 2014 high appears to be leading the wider Market which could be in a process of forming significant top now. If correct then already weak stock such as this one could be adversely affected.
Please Note:
The schematic price path shown on the chart is only an outline of anticipated directional move and not necessarily the exact highs and lows.
This is a very long term play and it would be absolutely normal for retracement along the way and sharp bounce would not necessarily alter the overall price path anticipated. This would offer shorter term swing trades in both direction.
Warning: This is my interpretation of price action using TA approach that I consider helps me most but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
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DanV
danv-charting.com
