Green Mountain Coffee Roasters (NASDAQ: GMCR) is a
favorite among traders and the financial media, not to mention among
java lovers in the ever-growing coffee culture in the United States. The
stock's volatile swings during the past few years were enough to
satisfy even the most voracious appetite for volatility. In recent
months, GMCR has settled into a consolidation phase, but now looks
poised for a breakout.
Before looking at GMCR's chart, I'd like to
note the dramatic slide in the price of coffee futures during the past
two and a half years. After topping in May 2011, coffee futures have
slipped more than 60% and continue to fall.
While
there is no direct inverse correlation between the price of coffee
futures and the stock of Green Mountain Coffee Roasters, it certainly
would be difficult to make the case that lower input costs are hurting
the company. So, from a fundamental point of view, as I walk through the
charts below, keep in mind that lower input costs should be a positive
for the stock.
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