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Chart to Watch: Keurig Green Mountain Inc (GMCR)

Is uptrending GMCR due for a reversal?

by 7/3/2014 11:34:37 AM
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It's been a bullish session for Keurig Green Mountain Inc (NASDAQ:GMCR) so far, with the stock up 2.4% at last look to trade at $127.14. Earlier this morning, the shares peaked at $128.50 -- representing a new all-time high for GMCR.

However, it's worth nothing that this is the third time in the last three weeks GMCR has touched an intraday peak above $128, and then quickly retreated back below this level. This rapid-fire triple top formation may suggest that GMCR is due for a downturn, as buying pressure has consistently tapered off near the $128 level.

At last check, however, the stock remains perched above support at its 10-day and 20-day moving averages, which have guided the K-Cup parent higher since early May. These trendlines are currently located at $123.55 and $121.84, respectively.

GMCR since February 2014 with 10-Day and 20-Day Moving Averages

Even after a recent burst of short-covering activity, quite a few traders are still betting bearishly on GMCR. Short interest accounts for 9.8% of the stock's float, with this accumulation of pessimistic positions representing 4.1 times the equity's average daily trading volume.

Likewise, analysts aren't exactly all-in on Keurig Green Mountain Inc. Among the 12 analysts tracking the shares, only 42% have deemed the coffee stock worthy of a "buy" or better rating.

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