What do you do with Green Mountain Coffee Roasters (GMCR) now?
Discussed in this article: Green Mountain Coffee Roasters Inc ( $GMCR )
We’re going to look at Green Mountain Coffee Roasters ( NASDAQ:GMCR ). This was actually a pretty good short this morning, a really good short. The stock gapped up on news that Coke ( NYSE:KO) was buying 10 percent of the company for something like 1.25 billion dollars. So that immediately raises the market cap to over twelve billion, as far as what the company would actually be worth if we take Coca-Cola’s ( NYSE:KO ) purchase price as the market valuation for the company.
Well that’s just kind of stupid high, that makes it worth more than Under Armour ( NYSE:UA ), more than a lot of companies that are actually going to do, and are doing, much better then Green Mountain Coffee Roasters ( NASDAQ:GMCR ). I’m sure Coke ( NYSE:KO) had a reason for buying this, but the bottom line is, if you bought it right up at the top, you didn’t do very well.
So when a stock gaps up so much and then trades down and closes near the lower end of the range, you really need to be careful about that. If you just looked here and said, “Oh my gosh, it’s up 26 percent, that’s awesome!” It is, if you were long yesterday and were able to sell when the stock was up even more.
But for now what you want to be doing is, you want to be looking and trying to figure out if more of this gap is going to be filled. You’re probably not going to get a filling of the entire gap, but the way this stock has been trading, it would actually kind of surprise me if this stock didn’t come into this box and start filling it a little bit.
So I would just suggest being careful of this stock right now. You can look here on the weekly time frame, this is definitely a power move, it’s definitely a break out here, it’s not quite past the 2011 highs, but it is a breakout. I’m just saying as a short-term entry, I think you’re going to be able to get it below $100.00.