GMCR update 5/27/2015: getting close to a trade-able bottom, and possible $50 upside potential?

GMCR has now almost retraced 50% since it traded for 36 cents (!!) over 20 yrs ago. Yes, that’s how much price has fallen; almost 50%. So is there an end in sight? Yes, IMHO we’re getting close to a primary A bottom, to be followed by a trade-able and highly profitable Primary B wave. First things first, where can we most likely expect Primary A to bottom? IMHO in the $80 to $85 region. Why? Please see the charts below (click each to enlarge)

GMCR update 5272015

The wave count has GMCR now in major c of primary A, and we can see that the 50% retrace of C1 ($0.36 to $159) and the major c = major a extension coincide at around $80 ($79 and $82, to be exact, respectively). Note that primary B is projected to retrace back to $110-$130 assuming Cycle 2 is a zigzag. But it may very well turn into a flat of sorts (where A=B=C). That we don’t know until after the fact.

However, additional evidence for the $80 level as a possible Primary A low is found in the weekly chart, where the weekly S1 is at $84, as well as the 150w SMA ($85), while the 200w SMA is now at $78: orange circle. Hence, all 3 of these levels coincide with the aforementioned 50% retrace and c=a levels.

GMCR update 5272015A

In addition, the weekly RSI5 is extremely overbought and begging for a snap back, blue circle, while the MACD-histogram is setting up marginal + div. The daily chart shows more + div on both the RSI5 and MACD-histogram (red vs green lines). Although divergence is divergence till it isn’t; we do need to be mindful of it. With a price of $84, and a possible low of $78, while we can expect upside to possible $130, the risk reward is starting to favor long instead of short as it’s 1:8 ($6 vs $50)

GMCR update 5272015B

 

 

 

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