GMCR Short Update - TTT Subscriber Content
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On this weekly chart of our current short idea GMCR we see that it's had quite an incredible run. It is doomed to collapse at some point, but if not now then we've got the tight stop set at closes above $112.
Wednesday it displayed remarkable relative weakness, managing to drop over 1% while the overall market was skyrocketing.
At bottom we have highlighted in a red rectangle what we think will prove to be important breakdowns in the momentum indicators. These don't guarantee it'll drop while we're short, but they add compelling reasons to be short.
At one point being short GMCR has already offered us up to 10% gains, and at some point if we're prudent with entries and stops it should offer far more as it should eventually move to meet the 200-week moving average (in blue) far below.
Also showing relative weakness Wednesday was Goldman Sachs (GS) and the entire banking sector. That's disconcerting for bulls, as any sustained market rally will need the financial sector's participation so that's one reason we remain cautious regarding going long and why we'll stay short GMCR below our stop level even if the Daily STI is bullish.