Exxon Green Mountain Coffee Roasters (GMCR) has been one of the high flyers for the processed and packaged Goods sector with a share price currently sitting at around $51. As, shares have risen to an all-time high of $115.98 on September 20th. Since that time the price of the stock has declined by 57%. This is based upon concerns that shares have become overvalued. Since November 15th it has been in a free fall, with the company reporting disappointing earnings per share of $.47 cents (for the third quarter of 2011) in comparison with analysts’ consensus of $.48 cents. While, their sales figures were $711.9 million, which is below the $761.4 million that Wall Street was looking for. These disappointing numbers, led to decreases of 49% in share prices since Mid-November. As a result, both investors and traders are divided as to if this is a good long term buy or a possible shorting opportunity.

The Changing Trends

When you look at the stock, it is clear that there were changes in the trend with it becoming bearish. This occurred on October 19th, when there was a decline in share prices from $84.78 to $69.50 (with a close of $69.80). At the time, the 200 day moving average was sitting at $72.73. This is significant, because the close below the 200 day moving average is an indication that the stock has begun a downward trend. Since that time, shares have fallen to $34.06, which has caused some investors to believe that the company is offering an outstanding long term valuation based on the recent sell off.To continue reading, Click here